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What changed in Abbott Laboratories's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Abbott Laboratories's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+295 added−284 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-17)

Top changes in Abbott Laboratories's 2023 10-K

295 paragraphs added · 284 removed · 229 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

23 edited+1 added−1 removed59 unchanged
Biggest changeThe principal products included in the Medical Devices segment are: • rhythm management products, including Assurity MRI ® and Endurity MRI ® pacemaker systems, and Aveir ® VR single-chamber VR leadless pacemaker system; Ellipse ® , Fortify Assura ® , and Gallant ® implantable cardioverter defibrillators and Gallant and Quadra Assura MP ® implantable cardioverter defibrillator with cardiac resynchronization therapy and MultiPoint™ Pacing technology; and Confirm Rx ® and Jot Dx ® implantable cardiac monitors; • electrophysiology products, including the TactiFlex™ and TactiCath ® families of ablation catheters, and FlexAbility ® irrigated ablation catheters; EnSite ® family of cardiac mapping systems; Agilis ® NxT and Swartz™ introducer catheters; the Advisor ® HD Grid mapping catheter; and ViewFlex™ family of intracardiac echocardiography catheters; • heart failure related products, including the HeartMate ® left ventricular assist device family, the CardioMEMS ® HF System pulmonary artery sensor, a heart failure monitoring system, and the CentriMag ® System, an acute mechanical circulatory support system; • vascular products, including the XIENCE ® family of drug-eluting coronary stent systems developed on the Multi-Link Vision ® platform; StarClose SE ® , Perclose ProGlide ® and Perclose ProStyle ® vessel closure devices, TREK ® coronary balloon dilatation products, Hi-Torque Balance Middleweight Universal II ® guidewires, Supera ® Peripheral Stent System, a peripheral vascular stent system; Acculink ® /Accunet ® and Xact ® /Emboshield NAV6 ® , carotid stent systems; the OPTIS ® integrated systems with Ultreon™ 1.0 Software, compatible with the Dragonfly OPTIS ® imaging catheter and PressureWire ® fractional flow reserve measurement systems; and the JETi ® peripheral thrombectomy systems for clot removal; • structural heart products, including MitraClip ® , a mitral valve transcatheter edge-to-edge repair system; TriClip ® , a tricuspid valve transcatheter edge-to-edge repair system; Epic ® , a surgical family of aortic valve and mitral valve replacement devices; Portico ® and Navitor™ transcatheter aortic heart valves; Regent™ and Masters Series™ mechanical heart valves; Amplatzer ® PFO occluders; Amplatzer Amulet ® occluder devices; and the Tendyne ® transcatheter mitral valve replacement system; • continuous glucose and blood glucose monitoring systems under the FreeStyle ® brand such as the FreeStyle Libre ® system, including sensors, data management decision software, test strips, and accessories for people with diabetes; and • neuromodulation products, including spinal cord stimulators Proclaim ® Elite and Proclaim ® XR Recharge-free implantable pulse generators (IPG) and Prodigy MRI ® IPG, each with BurstDR ® stimulation, and Proclaim ® DRG IPG, a neurostimulation device designed for dorsal root ganglion therapy, for the treatment of chronic pain disorders; and the Infinity ® Deep Brain Stimulation System with directional lead technology for the treatment of movement disorders. 3 Table of Contents These products are subject to competition in technological innovation, price, convenience of use, service, product performance, long-term supply contracts, and product potential for overall cost-effectiveness and productivity gains.
Biggest changeThe principal products included in the Medical Devices segment are: • rhythm management products, including Assurity MRI ® and Endurity MRI ® pacemaker systems, and Aveir ® single-chamber (VR and AR) and Aveir ® dual chamber (DR) leadless pacemaker systems; Ellipse ® , Fortify Assura ® , and Gallant ® implantable cardioverter defibrillators and Gallant and Quadra Assura MP ® implantable cardioverter defibrillator with cardiac resynchronization therapy and MultiPoint™ Pacing technology; and Confirm Rx ® , Jot Dx ® and Assert-IQ ® implantable cardiac monitors; • electrophysiology products, including the TactiFlex ® and TactiCath ® families of ablation catheters, and FlexAbility ® irrigated ablation catheters; EnSite ® family of cardiac mapping systems; Agilis ® NxT and Swartz™ introducer catheters; the Advisor ® HD Grid mapping catheter; and ViewFlex ® family of intracardiac echocardiography catheters; • heart failure related products, including the HeartMate ® left ventricular assist device family; the CardioMEMS ® HF System pulmonary artery sensor, a heart failure monitoring system; the CentriMag ® System, an acute mechanical circulatory support system; and patient self-testing products and services; • vascular products, including the XIENCE ® family of drug-eluting coronary stent systems developed on the Multi-Link Vision ® platform; StarClose SE ® , Perclose ProGlide ® and Perclose ProStyle ® vessel closure devices, TREK ® coronary balloon dilatation products, Hi-Torque Balance Middleweight Universal II ® guidewires, Supera ® Peripheral Stent System, a peripheral vascular stent system; Acculink ® /Accunet ® and Xact ® /Emboshield NAV6 ® , carotid stent systems; the OPTIS ® integrated systems with Ultreon™ 1.0 and 2.0 Software, compatible with the Dragonfly OPTIS ® and OpStar ® imaging catheters and PressureWire ® fractional flow reserve measurement systems; the JETi ® peripheral thrombectomy systems for clot removal; and Diamondback 360 ® coronary and peripheral orbital atherectomy systems; • structural heart products, including MitraClip ® , a mitral valve transcatheter edge-to-edge repair system; TriClip ® , a tricuspid valve transcatheter edge-to-edge repair system; Epic ® , a surgical family of aortic valve and mitral valve replacement devices; Portico ® and Navitor ® transcatheter aortic heart valves; Regent™ and Masters Series ® mechanical heart valves; Amplatzer ® PFO occluders; Amplatzer Amulet ® occluder devices; and the Tendyne ® transcatheter mitral valve replacement system; • continuous glucose and blood glucose monitoring systems under the FreeStyle ® brand such as the FreeStyle Libre ® system, including sensors, data management decision software, test strips, and accessories for people with diabetes; and • neuromodulation products, including spinal cord stimulators Proclaim ® Plus and Proclaim ® XR recharge-free implantable pulse generators (IPG) and rechargeable Eterna ® IPG, each with BurstDR ® stimulation, and Proclaim ® DRG IPG, a neurostimulation device designed for dorsal root ganglion therapy, for the treatment of chronic pain disorders; and the Infinity ® Deep Brain Stimulation System with directional lead technology for the treatment of movement disorders. 3 Table of Contents These products are subject to competition in technological innovation, price, convenience of use, service, product performance, long-term supply contracts, and product potential for overall cost-effectiveness and productivity gains.
The principal products included in the Nutritional Products segment are: • various forms of infant formula and follow-on formula, including Similac ® , Similac ® 360 Total Care ® , Similac Pro-Advance ® , Similac ® Advance ® , Similac ® 360 Total Care ® Sensitive, Similac Pro-Sensitive ® , Similac Sensitive ® , Go & Grow by Similac ® , Similac ® NeoSure ® , Similac ® Organic, Similac ® Special Care ® , Similac Total Comfort ® , Similac ® Soy Isomil ® , Similac ® Alimentum ® , EleCare ® , Gain™, and Grow™; • adult and other pediatric nutritional products, including Ensure ® , Ensure Plus ® , Ensure ® Enlive ® , Ensure ® (with NutriVigor ® ), Ensure ® Max Protein, Ensure ® High Protein, Glucerna ® , Glucerna Hunger Smart ® , ProSure™, PediaSure ® , PediaSure SideKicks ® , PediaSure ® Peptide, Juven ® , Abound™, Pedialyte ® and Zone Perfect ® ; and • nutritional products used in enteral feeding in health care institutions, including Jevity ® , Glucerna ® 1.2 Cal, Glucerna ® 1.5 Cal, Osmolite ® , Oxepa ® , Freego™ (Enteral Pump) and Freego™ sets, Nepro ® , and Vital ® .
The principal products included in the Nutritional Products segment are: • various forms of infant formula and follow-on formula, including Similac ® , Similac ® 360 Total Care ® , Similac Pro-Advance ® , Similac ® Advance ® , Similac ® 360 Total Care ® Sensitive, Similac ® Sensitive, Go & Grow by Similac ® , Similac ® NeoSure ® , Similac ® Organic, Similac ® Special Care ® , Similac Total Comfort ® , Similac ® Soy Isomil ® , Similac ® Alimentum ® , EleCare ® , Gain™, and Grow™; • adult and other pediatric nutritional products, including Ensure ® , Ensure Plus ® , Ensure ® Enlive ® , Ensure ® (with NutriVigor™), Ensure ® Max Protein, Ensure ® High Protein, Glucerna ® , Glucerna ® Hunger Smart ® , ProSure™, PediaSure ® , PediaSure SideKicks ® , PediaSure ® Peptide, Juven ® , Abound™, Pedialyte ® and Zone Perfect ® ; and • nutritional products used in enteral feeding in health care institutions, including Jevity ® , Glucerna ® 1.2 Cal, Glucerna ® 1.5 Cal, Osmolite ® , Oxepa ® , Freego™ (Enteral Pump) and Freego™ sets, Nepro ® , and Vital ® .
Abbott has ten such networks, which are: Early Career Network (supporting early career employees), Asian Leadership and Cultural Network, Black Business Network, Flex Network (supporting employees with part-time and flexible schedules), LA VOICE Network (supporting Hispanic and Latino employees), disABILITY Network (supporting employees with disabilities), PRIDE (supporting LGBTQ employees), Veterans Network, Women Leaders of Abbott, and Women in STEM.
Abbott has ten such networks, which are: Asian Leadership and Cultural Network, Black Business Network, disABILITY Network (supporting employees with disabilities), Early Career Network (supporting early career employees), Flex Network (supporting employees with part-time and flexible schedules), LA VOICE Network (supporting Hispanic and Latino employees), PRIDE (supporting LGBTQ employees), Veterans Network, Women Leaders of Abbott, and Women in STEM.
The principal products included in the broad therapeutic area portfolios of the Established Pharmaceutical Products segment are: • gastroenterology products, including Creon™, for the treatment of pancreatic exocrine insufficiency associated with several underlying conditions, including cystic fibrosis and chronic pancreatitis; Duspatal™ and Dicetel™, for the treatment of irritable bowel syndrome or biliary spasm; Heptral™, Transmetil™, and Samyr™, for the treatment of intrahepatic cholestasis (associated with liver disease) or depressive symptoms; and Duphalac™, for regulation of the physiological rhythm of the colon; • women’s health products, including Duphaston™, for the treatment of many different gynecological disorders; and Femoston™, a hormone replacement therapy for postmenopausal women; • cardiovascular and metabolic products, including Lipanthyl™ and TriCor™, for the treatment of dyslipidemia; Teveten™ and Teveten™ Plus, for the treatment of essential hypertension, and Physiotens™, for the treatment of hypertension; and Synthroid™, for the treatment of hypothyroidism; • pain and central nervous system products, including Serc™, for the treatment of Ménière’s disease and vestibular vertigo; Brufen™, for the treatment of pain, fever, and inflammation; and Sevedol™, for the treatment of severe migraines; and • respiratory drugs and vaccines, including the anti-infective clarithromycin (sold under the trademarks Biaxin™, Klacid™, and Klaricid™); and Influvac™, an influenza vaccine.
The principal products included in the broad therapeutic area portfolios of the Established Pharmaceutical Products segment are: • gastroenterology products, including Creon™, for the treatment of pancreatic exocrine insufficiency associated with several underlying conditions, including cystic fibrosis and chronic pancreatitis; Duspatal™ and Dicetel™, for the treatment of irritable bowel syndrome or biliary spasm; Heptral™, Transmetil™, and Samyr™, for the treatment of intrahepatic cholestasis (associated with liver disease) or depressive symptoms; and Duphalac™, for regulation of the physiological rhythm of the colon; • women’s health products, including Duphaston™, for the treatment of many different gynecological disorders; and Femoston™, a hormone replacement therapy for postmenopausal women; • cardiovascular and metabolic products, including Lipanthyl™ and TriCor™, for the treatment of dyslipidemia; Teveten™ and Teveten™ Plus, for the treatment of essential hypertension, and Physiotens™, for the treatment of hypertension; and Synthroid™, for the treatment of hypothyroidism; • pain and central nervous system products, including Serc™, for the treatment of Ménière’s disease and vestibular vertigo; Brufen™, for the treatment of pain, fever, and inflammation; and Sevedol™, for the treatment of severe migraines; and • respiratory drugs and vaccines, including the anti-infective clarithromycin (sold under the trademarks Klacid™, Claribid™, and Klaricid™); and Influvac™, an influenza vaccine.
A major focus is cost containment. Efforts to reduce health care costs are also being made in the private sector, notably by health care payors and providers, which have instituted various cost reduction and containment measures. Abbott expects insurers and providers will continue attempts to reduce the cost or utilization of health care products.
A major focus is cost containment. Efforts to reduce health care costs are also being made in the private sector, notably by health care payors and providers, which have instituted various cost reduction and containment measures. Abbott expects that insurers and providers will continue attempts to reduce the cost or utilization of health care products.
Certain of these agencies require our clinical laboratories to meet quality assurance, quality control, and personnel standards and undergo inspections. During the COVID-19 public health emergency, many pandemic-related products (including diagnostic tests) were authorized by regulators for emergency use solely during the pandemic.
Certain of these agencies require our clinical laboratories to meet quality assurance, quality control, and personnel standards and undergo inspections. During the COVID-19 public health emergency, many pandemic-related products (including diagnostic tests) were authorized by regulators for emergency use during the pandemic.
These systems are used for screening and/or diagnosis for cancer, cardiac and metabolic disorders, drugs of abuse, thyroid function, fertility, neurologic and general chemistries, infectious diseases such as hepatitis and HIV, therapeutic drug monitoring, and a suite of SARS-CoV-2 serology assays; • molecular diagnostics polymerase chain reaction (PCR) instrument systems, including Alinity ® m and m2000™ that automate the extraction, purification, and preparation of DNA and RNA from patient samples, and detect and measure infectious agents including HIV, hepatitis, HPV, sexually transmitted infections, SARS-CoV-2 and influenza A & B, and respiratory syncytial virus (RSV); and products for oncology with the Vysis ® FISH product line of genomic-based tests; • point of care systems, including the i-STAT ® and next-generation i-STAT ® Alinity ® and cartridges for testing blood gas, chemistry, electrolytes, coagulation and immunoassay; • rapid diagnostics lateral flow testing products in the area of infectious diseases such as SARS-CoV-2, including the BinaxNOW ® and Panbio ® rapid testing platforms, influenza, HIV, hepatitis, and tropical diseases such as malaria and dengue fever; molecular point-of-care testing for HIV, including the m-PIMA ® HIV-1/2 Viral Load Test, and for SARS-CoV-2 and influenza A & B, RSV and strep A, including the ID NOW ® rapid molecular system; cardiometabolic testing, including Afinion ® and Cholestech LDX ® platforms and tests; a toxicology business for drug and alcohol testing; and consumer self-testing; and • informatics and automation solutions for use in laboratories, including laboratory automation systems such as the GLP systems track™, the RALS ® point of care solution, and AlinIQ ® , a suite of informatics tools and professional services.
These systems are used for screening and/or diagnosis for cancer, cardiac and metabolic disorders, drugs of abuse, thyroid function, fertility, neurologic and general chemistries, infectious diseases such as hepatitis and HIV, therapeutic drug monitoring, and a suite of SARS-CoV-2 serology assays; • molecular diagnostics polymerase chain reaction (PCR) instrument systems, including Alinity ® m and m2000™ that automate the extraction, purification, and preparation of DNA and RNA from patient samples, and detect and measure infectious agents including HIV, hepatitis, HPV, sexually transmitted infections, SARS-CoV-2 and influenza A & B, and respiratory syncytial virus (RSV); and products for oncology with the Vysis ® FISH product line of genomic-based tests; • point-of-care systems, including the i-STAT ® and i-STAT ® Alinity ® and cartridges for testing blood gas, chemistry, electrolytes, coagulation and immunoassay; • rapid diagnostics lateral flow testing products in the area of infectious diseases such as SARS-CoV-2, including the BinaxNOW ® and Panbio ® rapid testing platforms, influenza, HIV, hepatitis, and tropical diseases such as malaria and dengue fever; molecular point-of-care testing for HIV, including the m-PIMA ® HIV-1/2 Viral Load Test, and for SARS-CoV-2 and influenza A & B, RSV and strep A, including the ID NOW ® rapid molecular system; cardiometabolic testing, including Afinion ® and Cholestech LDX ® platforms and tests; and a toxicology business for drug and alcohol testing; and • informatics and automation solutions for use in laboratories, including laboratory automation systems such as the GLP systems track™, the RALS ® point-of-care solution, and AlinIQ ® , a suite of informatics tools and professional services.
Women represented 47% of Abbott’s U.S. workforce, 46% of its global workforce, and 41% of its managers. 4 Table of Contents Talent Management Abbott has an integrated global talent management process that is designed to identify and assess talent across the organization and provide equal and consistent opportunities for employees to develop their skills.
Women represented 47% of Abbott’s U.S. workforce, 46% of its global workforce, and 42% of its managers. 4 Table of Contents Talent Management Abbott has an integrated global talent management process that is designed to identify and assess talent across the organization and provide equal and consistent opportunities for employees to develop their skills.
In the United States, depending upon the product, medical devices are generally marketed and sold directly to wholesalers, hospitals, ambulatory surgery centers, physicians’ offices, and distributors from Abbott-owned distribution centers and public warehouses. Outside the United States, sales are made either directly to customers or through distributors, depending on the market served.
In the United States, depending upon the product, medical devices are generally marketed and sold directly to wholesalers, hospitals, ambulatory surgery centers, physicians’ offices, and distributors from Abbott-owned distribution centers, public warehouses or third party distributors. Outside the United States, sales are made either directly to customers or through distributors, depending on the market served.
Regulations under federal, state, and various other countries’ environmental laws impose stringent limitations on emissions and discharges to the environment from various manufacturing operations. Abbott’s capital and operating expenditures for pollution control in 2022 were not material and are not expected to be material in 2023.
Regulations under federal, state, and various other countries’ environmental laws impose stringent limitations on emissions and discharges to the environment from various manufacturing operations. Abbott’s capital and operating expenditures for pollution control in 2023 were not material and are not expected to be material in 2024.
A more detailed discussion on the global supply chain disruptions and its resulting impact on Abbott’s business is contained in Item 1A. Risk Factors and in the "Financial Review” section in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
A more detailed discussion on the global supply chain challenges and its resulting impact on Abbott’s business is contained in Item 1A. Risk Factors and in the "Financial Review” section in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Abbott’s global wellness programs are designed to meet the unique needs of employees across businesses and geographies and offer a wide range of programs, including supporting the mental, financial and physical health of employees and their families.
Abbott’s global wellness programs are designed to meet the unique needs of employees across businesses and geographies and offer a wide range of programs, including supporting the emotional, physical, and financial health of employees and their families.
Abbott provides its employees opportunities to grow and develop their careers, market competitive compensation and benefit programs, and the satisfaction of being part of a global company dedicated to improving health in more than 160 countries. As of December 31, 2022, Abbott employed approximately 115,000 people, 69% of whom were employed outside of the U.S.
Abbott provides its employees opportunities to grow and develop their careers, market competitive compensation and benefit programs, and the satisfaction of being part of a global company dedicated to improving health in more than 160 countries. As of December 31, 2023, Abbott employed approximately 114,000 people, 69% of whom were employed outside of the U.S.
All networks are open to all Abbott employees. Abbott offers professional development programs, which provide recent college graduates the opportunity to rotate through different areas of Abbott, often with the chance to work outside their home country. In 2022, 53% of the participants were women. Also, Abbott hosts hundreds of college students for paid internships.
All networks are open to all Abbott employees. Abbott offers professional development programs, which provide recent college graduates the opportunity to rotate through different areas of Abbott, often with the chance to work outside their home country. In 2023, 58% of the participants were women. Also, Abbott hosts hundreds of college students for paid internships.
Abbott ties executive compensation to human capital management, including diversity outcomes, to sustain an inclusive culture and the fair and balanced treatment of Abbott’s employees. In 2022, Abbott released the second edition of its diversity, equity, and inclusion report, providing an update on Abbott’s plans, strategies, and actions to fulfill its commitment to develop an inclusive workplace.
Abbott ties executive compensation to human capital management, including diversity outcomes, to sustain an inclusive culture and the fair and balanced treatment of Abbott’s employees. In 2023, Abbott released the third edition of its diversity, equity, and inclusion report, providing an update on Abbott’s plans, strategies, and actions to fulfill its commitment to develop an inclusive workplace.
In 2022, 58% of the U.S. interns were women and 59% were minorities. Further, Abbott has offered a STEM internship program for high school students in the U.S. since 2012 and since 2021, students who complete the program receive a college credit recommendation from the American Council on Education.
In 2023, 59% of the U.S. interns were women and 61% were minorities. Further, Abbott has offered a STEM internship program for high school students in the U.S. since 2012 and since 2021, students who complete the program receive a college credit recommendation from the American Council on Education.
For example, the European Union, China, various other countries, and various U.S. states (e.g., California, Virginia, and Colorado) have enacted data protection laws that contain significant compliance obligations and financial penalties for noncompliance.
For example, the European Union, China, various other countries, and various U.S. states (e.g., California, Virginia, and Colorado) have enacted or are considering enacting data protection laws that contain significant compliance obligations and financial penalties for noncompliance.
For example, for over 20 years, Abbott has annually offered Exercise Across Abbott, which is a four-week physical wellness program that encourages employees to team up with colleagues and track how many minutes they exercise each day. Over 21,000 Abbott employees across 74 countries took part in 2022.
For example, for over 20 years, Abbott has annually offered Exercise Across Abbott, which is a four-week physical wellness program that encourages employees to team up with colleagues and track how many minutes they exercise each day. Over 28,000 Abbott employees across 75 countries took part in 2023.
The program’s objective is to increase the number of students pursuing STEM-related careers and contribute to a more diverse talent pipeline for Abbott. In 2022, 69% of the STEM interns were women and 78% were minorities. Health and Safety The health, safety and wellness of its employees is an Abbott priority embedded at every level of its business.
The program’s objective is to increase the number of students pursuing STEM-related careers and contribute to a more diverse talent pipeline for Abbott. In 2023, 74% of the STEM interns were women and 84% were minorities. Health and Safety The health, safety and wellness of its employees is an Abbott priority embedded at every level of its business.
Principal trademarks and the products they cover are discussed in the Narrative Description of Business on pages 1 through 4. These, and various patents which expire during the period 2023 to 2043, in the aggregate, are believed to be of material importance in the operation of Abbott’s business.
Principal trademarks and the products they cover are discussed in the Narrative Description of Business on pages 1 through 4. These, and various patents that expire during the period 2024 to 2044, in the aggregate, are believed to be of material importance in the operation of Abbott’s business.
Abbott is evaluating the potential impacts of the end of the public health emergency, and it will continue to monitor further regulatory actions from relevant U.S. government agencies and assess potential impacts on pandemic-related government policies and product authorizations. Abbott’s international operations are also affected by trade and investment regulations in many countries.
Abbott will continue to monitor further regulatory actions from relevant U.S. government agencies and assess potential impacts on pandemic-related government policies and product authorizations. Abbott’s international operations are also affected by trade and investment regulations in many countries. These may require local investment, restrict Abbott’s investments, or limit the import of raw materials and finished products.
In addition, many governments enacted policies to expedite or promote access to health care in order to slow or stop the spread of the virus. Examples include expansion of telehealth coverages and increased reimbursements for diagnostic testing. On January 30, 2023, the U.S. announced that it plans to end the public health emergency on May 11, 2023.
In addition, many governments enacted policies to expedite or promote access to health care in order to slow or stop the spread of the virus. Examples included expansion of telehealth coverages and increased reimbursements for diagnostic testing.
Due to disruptions to the global supply chain caused in part by the COVID-19 pandemic and macroeconomic conditions such as inflationary pressures and labor shortages, Abbott has experienced availability issues with some materials and electronic components. To date, Abbott has been able to manage these challenges without significant supply disruptions or shortages for raw materials and supplies.
After several years of challenges to the global supply chain caused in part by the COVID-19 pandemic and macroeconomic conditions such as inflationary pressures and labor shortages, Abbott's global supply chain has improved. There have been no recent significant availability problems or supply shortages for raw materials or supplies.
Removed
These may require local investment, restrict Abbott’s investments, or limit the import of raw materials and finished products.
Added
The U.S. federal public health emergency expired on May 11, 2023, which has not impacted the availability of the products authorized under the FDA’s Emergency Use Authorizations (EUA). Abbott is actively pursuing the FDA’s customary regulatory approval process for various COVID-19 diagnostic tests, because the FDA could revoke or terminate its EUAs.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

34 edited+10 added−5 removed53 unchanged
Biggest changeThe COVID-19 pandemic has contributed to global supply chain disruptions, which have adversely impacted the cost and availability of certain raw materials, supplies, and services. While Abbott has taken actions to offset some of these inflationary pressures in its supply chain, Abbott may not be able to completely offset all the increases in its operational costs.
Biggest changeFor example, the COVID-19 pandemic and macroeconomic conditions such as inflationary pressures and labor shortages contributed to global supply chain challenges over the last few years, which adversely impacted the cost and availability of certain raw materials, supplies, and services.
Abbott may acquire other businesses, license rights to technologies or products, form alliances, or dispose of or spin-off businesses, which could cause it to incur significant expenses and could negatively affect profitability. From time to time, Abbott pursues acquisitions, licensing arrangements, and strategic alliances, or dispose of or spin-off some of its businesses, as part of its business strategy.
Abbott may acquire other businesses, license rights to technologies or products, form alliances, or dispose of or spin-off businesses, which could cause it to incur significant expenses and could negatively affect profitability. From time to time, Abbott pursues acquisitions, licensing arrangements, and strategic alliances, or may dispose of or spin-off some of its businesses, as part of its business strategy.
As a global healthcare company, public health crises, such as the widespread outbreaks of infectious diseases like the COVID-19 pandemic, may negatively impact certain of Abbott's operations.
As a global healthcare company, public health crises, such as the widespread outbreaks of infectious diseases like the COVID-19 pandemic, may negatively impact certain Abbott's operations.
Health concerns and significant changes in political or economic conditions caused by such outbreaks can cause, and during the COVID-19 pandemic have caused, significant reductions in demand for certain products, increased difficulty in serving customers, disruptions to manufacturing and supply chains, and negative effects on certain of Abbott’s operations as well as the operations of its suppliers, distributors and other third-party partners.
Health concerns and significant changes in political or economic conditions caused by such outbreaks can cause, and during the COVID-19 pandemic caused, significant reductions in demand for certain products, increased difficulty in serving customers, disruptions to manufacturing and supply chains, and negative effects on certain of Abbott’s operations as well as the operations of its suppliers, distributors and other third-party partners.
Additional risks associated with Abbott’s international operations include: • differing local product preferences and product requirements; • trade protection measures, including tariffs, import or export licensing requirements, other governmental restrictions such as trade sanctions, and changes to international trade agreements; • difficulty in establishing, staffing, and managing operations; • differing labor regulations; • potentially negative consequences from changes in or interpretations of tax laws; • political and economic instability, including sovereign debt issues; • restrictions on local currency conversion and/or cash extraction; • price controls, limitations on participation in local enterprises, expropriation, nationalization, and other governmental action; • inflation, recession, and fluctuations in interest rates; • diminished protection of intellectual property; and • potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery, and other similar laws and regulations, including the Foreign Corrupt Practices Act and the U.K.
Additional risks associated with Abbott’s international operations include: • differing local product preferences and product requirements; • trade protection measures, including tariffs, import or export licensing requirements, other governmental restrictions such as trade sanctions, and changes to international trade agreements; • difficulty in establishing, staffing, and managing operations; • differing labor regulations; • potentially negative consequences from changes in or interpretations of tax laws; • geopolitical and economic instability, including sovereign debt issues; • restrictions on local currency conversion and/or cash extraction; • price controls, limitations on participation in local enterprises, expropriation, nationalization, and other governmental action; • inflation, recession, and fluctuations in interest rates; • diminished protection of intellectual property; and • potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery, and other similar laws and regulations, including the Foreign Corrupt Practices Act and the U.K.
For additional information concerning data privacy and security regulation, see the discussion in “Regulation” under Item 1, “Business.” A breach of protected personal information could result in adverse consequences, including regulatory inquiries or litigation, increased costs and expenses, reputational damage, lost revenue, and fines or penalties. 9 Table of Contents Abbott invests in its systems and technology and in the protection of its products and data to reduce the risk of an attack or other significant disruption, and monitors its systems on an ongoing basis for any current or potential threats or vulnerabilities and for changes in technology and the regulatory environment.
For additional information concerning data privacy and security regulation, see the discussion in “Regulation” under Item 1, “Business.” A breach of protected personal information could result in adverse consequences, including regulatory inquiries or litigation, increased costs and expenses, reputational damage, lost revenue, and fines or penalties. 9 Table of Contents Abbott invests in its information systems and technology and in the protection of its products and data to reduce the risk of a cybersecurity incident or other significant disruption, and monitors its information systems on an ongoing basis for any current or potential cybersecurity threats or vulnerabilities and for changes in technology and the regulatory environment.
Many other factors can affect Abbott’s profitability and its financial condition, including: • changes in or interpretations of laws and regulations, including changes in accounting standards, taxation requirements, product approval standards, product labeling standards, source and use laws, and environmental laws; • differences between the fair value measurement of assets and liabilities and their actual value, particularly for pensions, retiree health care, stock compensation, intangibles, goodwill, and contingent consideration; and for contingent liabilities such as litigation, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount; • changes in the rate of inflation (including the cost of raw materials, commodities, and supplies), interest rates, market value of Abbott’s equity investments, and the performance of investments held by Abbott or Abbott’s employee benefit trusts; • changes in the creditworthiness of counterparties that transact business with or provide services to Abbott or Abbott’s employee benefit trusts; • changes in business, economic, and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; global climate change, extreme weather and natural disasters; widespread outbreaks of infectious diseases; the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and pressure from third-party interest groups; 14 Table of Contents • changes in Abbott’s business units and investments and changes in the relative and absolute contribution of each to earnings and cash flow resulting from evolving business strategies, changing product mix, changes in tax laws or tax rates both in the U.S. and abroad and opportunities existing now or in the future; • changes in the buying patterns of a major distributor, retailer, wholesaler, or other customer resulting from buyer purchasing decisions, pricing, seasonality, or other factors, or other problems with licensors, suppliers, distributors, and business partners; and • legal difficulties, any of which could preclude or delay commercialization of products or adversely affect profitability, including claims asserting statutory or regulatory violations, and adverse litigation decisions.
Many other factors can affect Abbott’s profitability and its financial condition, including: • changes in or interpretations of laws and regulations, including changes in accounting standards, taxation requirements, product approval standards, product labeling standards, source and use laws, and environmental laws; • differences between the fair value measurement of assets and liabilities and their actual value, particularly for pensions, retiree health care, stock compensation, intangibles, goodwill, and contingent consideration; and for contingent liabilities such as litigation, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount; • changes in the rate of inflation (including the cost of raw materials, labor, commodities, and supplies), interest rates, market value of Abbott’s equity investments, and the performance of investments held by Abbott or Abbott’s employee benefit trusts; 14 Table of Contents • changes in the creditworthiness of counterparties that transact business with or provide services to Abbott or Abbott’s employee benefit trusts; • changes in business, economic, and geopolitical conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; global climate change, extreme weather and natural disasters; the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and pressure from third-party interest groups; • changes in Abbott’s business units and investments and changes in the relative and absolute contribution of each to earnings and cash flow resulting from evolving business strategies, and changing product mix; • changes in the buying patterns of a major distributor, retailer, wholesaler, or other customer resulting from buyer purchasing decisions, pricing, seasonality, or other factors, or other problems with licensors, suppliers, distributors, and business partners; and • legal difficulties, any of which could preclude or delay commercialization of products or adversely affect profitability, including claims asserting statutory or regulatory violations, and adverse litigation decisions.
Possible regulatory actions for non-compliance include warning letters, fines, damages, injunctions, civil penalties, recalls, consent decrees, seizures of Abbott’s products, and criminal prosecution.
Possible regulatory actions for non-compliance include warning letters, fines, damages, injunctions, civil penalties, recalls, consent decrees, seizures of Abbott’s products, and civil litigation and/or criminal prosecution.
Problems may arise during manufacturing for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials or the global supply chain, failure to meet product specifications, cyber attacks, natural disasters, and environmental factors. In addition, single suppliers are currently used for certain products and materials.
Problems may arise during manufacturing for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials or the global supply chain, failure to meet product specifications, cybersecurity incidents, natural disasters, and environmental factors. In addition, single suppliers are currently used for certain products and materials.
Sales outside of the United States in 2022 made up approximately 58 percent of Abbott’s net sales. Abbott’s profitability is affected by movement of the U.S. dollar against other currencies. Fluctuations in exchange rates between the U.S. dollar and other currencies may also affect the reported value of Abbott’s assets and liabilities, as well as its cash flows.
Sales outside of the United States in 2023 made up approximately 61 percent of Abbott’s net sales. Abbott’s profitability is affected by movement of the U.S. dollar against other currencies. Fluctuations in exchange rates between the U.S. dollar and other currencies may also affect the reported value of Abbott’s assets and liabilities, as well as its cash flows.
The international nature of Abbott’s business subjects it to additional business risks that may cause its revenue and profitability to decline. Abbott’s business is subject to risks associated with managing a global supply chain and doing business internationally. Sales outside of the United States in 2022 made up approximately 58 percent of Abbott’s net sales.
The international nature of Abbott’s business subjects it to additional business risks that may cause its revenue and profitability to decline. Abbott’s business is subject to risks associated with managing a global supply chain and doing business internationally. Sales outside of the United States in 2023 made up approximately 61 percent of Abbott’s net sales.
Furthermore, such widespread outbreaks may impact, and during the COVID-19 pandemic have impacted, the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, inflation rates (including in the U.S.), foreign currency exchange rates, and interest rates.
Furthermore, such widespread outbreaks may impact, and during the COVID-19 pandemic impacted, the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, inflation rates, foreign currency exchange rates, and interest rates.
There can be no assurance that these measures and efforts will prevent future attacks or other significant disruptions to any of the systems on which Abbott relies or that related product issues will not arise in the future.
There can be no assurance that these measures and efforts will prevent future cybersecurity incidents or other significant disruptions to any of the information systems on which Abbott relies or that related product issues will not arise in the future.
These actions could result in, among other things, substantial modifications to Abbott’s business practices and operations; refunds, recalls, or seizures of Abbott’s products; a total or partial shutdown of production in one or more facilities while Abbott or Abbott’s suppliers remedy the alleged violation; the inability to obtain future pre-market approvals or marketing authorizations; and withdrawals or suspensions of current products from the market.
These actions could result in, among other things, substantial modifications to Abbott’s business practices and operations; refunds, recalls, or seizures of Abbott’s products; a total or partial shutdown of production in one or more facilities while Abbott or Abbott’s suppliers remedy any actual or potential issues; the inability to obtain future pre-market approvals or marketing authorizations; and withdrawals or suspensions of current products from the market.
In addition, the COVID-19 pandemic has contributed to global supply chain disruptions, which have adversely impacted the cost and availability of certain raw materials, supplies, and services. 12 Table of Contents With regard to COVID-19 diagnostic testing, the FDA issued Emergency Use Authorizations (EUAs) for several COVID‑19 related products in 2020 and 2021, including Abbott diagnostic tests.
In addition, the COVID-19 pandemic contributed to global supply chain disruptions, which adversely impacted the cost and availability of certain raw materials, supplies, and services. 13 Table of Contents With regard to COVID-19 diagnostic testing, the FDA issued Emergency Use Authorizations (EUA) for several COVID‑19 related products in 2020 and 2021, including Abbott diagnostic tests.
To the extent Abbott or one of its suppliers or manufacturers experiences significant manufacturing problems, this could have a material adverse effect on Abbott’s revenues and profitability. Abbott has significant indebtedness, which could adversely affect its business, including decreasing its business flexibility. As of December 31, 2022, Abbott's consolidated indebtedness was approximately $16.8 billion.
To the extent Abbott or one of its suppliers or manufacturers experiences significant manufacturing problems, this could have a material adverse effect on Abbott’s revenues and profitability. Abbott has significant indebtedness, which could adversely affect its business, including decreasing its business flexibility. As of December 31, 2023, Abbott's consolidated indebtedness was approximately $14.7 billion.
Economic and Industry Risks Abbott is subject to risks related to public health crises, such as widespread outbreaks of infectious diseases like the COVID-19 pandemic, which has had, and may continue to have, a material effect on Abbott’s business, financial condition and results of operations.
Abbott is subject to risks related to public health crises, such as widespread outbreaks of infectious diseases like the COVID-19 pandemic, which had a material effect on Abbott’s business, financial condition and results of operations.
A significant attack or other disruption could result in adverse consequences, including increased costs and expenses, manufacturing challenges or disruption, problems with product availability, functionality or safety, damage to customer relations, reputational damage, lost revenue, and legal or regulatory penalties.
A significant cybersecurity incident or other disruption could result in adverse consequences, including regulatory inquiries or litigation, increased costs and expenses, manufacturing challenges or disruption, problems with product availability, functionality or safety, damage to customer relations, reputational damage, lost revenue, and fines or penalties.
There could be additional sanctions, economic volatility, cybersecurity threats, political instability, transportation and other supply disruptions, as well as collection default risk or limited availability of resources to conduct essential business processes that could have a material adverse impact to Abbott’s operations and financial condition. The resolution and long-term impact of this matter are uncertain and difficult to predict.
There could be additional sanctions, economic volatility, cybersecurity threats, political instability, transportation and other supply disruptions, as well as collection default or liquidity risks or limited availability of resources to conduct essential business processes that could have a material adverse impact to Abbott’s operations and financial condition.
Similarly, there can be no assurance that third party information technology providers or other partners with whom Abbott contracts will not suffer a significant attack or disruption that impacts customers like Abbott. Any significant breach, attack or other disruption involving Abbott’s systems or products could have a material adverse effect on Abbott’s business.
Similarly, there can be no assurance that third party information technology providers or other partners with whom Abbott contracts will not suffer a significant cybersecurity incident or disruption that impacts Abbott. Any significant cybersecurity incident or other disruption affecting Abbott’s information systems or products could have a material adverse effect on Abbott’s business, financial condition and results of operations.
Similar to other large multi-national companies, the size and complexity of the information technology systems on which Abbott relies for both its infrastructure and products make them susceptible to a cyber attack, malicious intrusion, breakdown, destruction, loss of data privacy, or other significant disruption.
Similar to other large multi-national companies, the size and complexity of the information systems on which Abbott relies for both its infrastructure and products make them susceptible to a cybersecurity incident, breakdown, destruction, loss of data privacy, or other significant disruption. These systems have been and are expected to continue to be the target of malware and other cybersecurity incidents.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Form 10-K contains forward-looking statements that are based on management’s current expectations, estimates, and projections. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” variations of these words, and similar expressions are intended to identify these forward-looking statements. Certain factors, including but not limited to those identified under “Item 1A.
Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “could,” “may,” variations of these words, and similar expressions are intended to identify these forward-looking statements. Certain factors, including but not limited to those identified under “Item 1A.
Laws and regulations affecting government benefit programs could impose new obligations on Abbott, require Abbott to change its business practices, and restrict its operations.
Laws and regulations affecting government benefit programs could impose new obligations on Abbott, require Abbott to change its business practices, and restrict its operations, which could result in a material adverse effect on Abbott's revenues, profitability, and financial condition.
A discussion of the steps taken to mitigate the impact of foreign exchange is contained in Item 7A, Quantitative and Qualitative Disclosures about Market Risk in Abbott’s 2022 Form 10-K.
A discussion of the steps taken to mitigate the impact of foreign exchange is contained in Item 7A, Quantitative and Qualitative Disclosures about Market Risk, of this report. Information on Abbott’s hedging arrangements is contained in Note 12 to the consolidated financial statements in this report.
The future extent to which supply chain disruptions may have a material effect on Abbott’s operating results is uncertain. A more detailed discussion on the supply chain disruptions impact on Abbott’s business is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report.
A discussion on the global supply chain challenges and its resulting impact on Abbott’s business is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.
These systems have been and are expected to continue to be the target of malware and other cyber attacks. In addition, third party hacking attempts may cause Abbott’s information technology systems and related products, protected data, or proprietary information to be compromised or stolen.
In addition, third party hacking attempts may cause Abbott’s information systems and related products, protected data, or proprietary information to be compromised or stolen.
Abbott is evaluating the potential impacts of the end of the public health emergency, and it will continue to monitor further regulatory actions from relevant U.S. government agencies and assess potential impacts on pandemic-related government policies and product authorizations.
Risk Factors.” The U.S. federal public health emergency (PHE) expired on May 11, 2023, which has not impacted the availability of the products authorized under the EUAs. Abbott will continue to monitor further regulatory actions from relevant U.S. government agencies and assess potential impacts on pandemic-related government policies and product authorizations.
A more detailed discussion on the impact of the COVID-19 pandemic on Abbott’s business is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report. Abbott is subject to cost containment efforts that could cause a reduction in future revenues and operating income.
Further, the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests. A more detailed discussion on the impact that the COVID-19 pandemic had on Abbott’s business is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.
Abbott’s products face intense competition from competitive products. Competitors’ products may be safer, more effective, more effectively marketed or sold, or have lower prices or superior performance features than Abbott’s products. Abbott cannot predict with certainty the timing or impact of the introduction of competitors’ products.
Competitors’ products may be safer, more effective, more effectively marketed or sold, or have lower prices or superior performance features than Abbott’s products.
A successful claim of patent or other intellectual property infringement could subject Abbott to significant damages or an injunction preventing the manufacture, sale or use of affected Abbott products. Any of these events could have a material adverse effect on Abbott’s profitability and financial condition. New products and technological advances by Abbott’s competitors may negatively affect Abbott’s results of operations.
A successful claim of patent or other intellectual property infringement could subject Abbott to significant damages or an injunction preventing the manufacture, sale or use of affected Abbott products.
Abbott may also be subject to additional restrictive covenants that would reduce flexibility. Legal and Regulatory Risks Abbott is subject to numerous governmental regulations and it is costly to comply with these regulations and to develop compliant products and processes. Abbott’s products are subject to rigorous regulation by the FDA and numerous international, supranational, federal, and state authorities.
Abbott may also be subject to additional restrictive covenants that would reduce flexibility. Legal and Regulatory Risks It is costly for Abbott to comply with numerous governmental regulations and to develop compliant products and processes, and consequences for non-compliance could have a material adverse effect on Abbott's revenues, profitability, cash flows, and financial condition.
These effects could cause a deterioration of Abbott’s credit rating, result in increased borrowing costs and interest expense, and decrease liquidity. Abbott depends on sophisticated information technology systems and maintains protected personal data, and a cyber attack or other breach affecting these information technology systems or protected data could have a material adverse effect on Abbott’s results of operations.
Abbott depends on sophisticated information systems and maintains protected personal data, and a significant cybersecurity incident or other disruption affecting these information systems or protected data could have a material adverse effect on Abbott’s business, financial condition and results of operations.
Financial instability and fiscal deficits in these countries may result in additional austerity measures to reduce costs, including health care.
Unfavorable economic conditions in certain countries may increase the time it takes to collect outstanding trade receivables or inhibit Abbott's ability to best utilize its cash. Financial instability and fiscal deficits in these countries may result in additional austerity measures to reduce costs, including health care.
In the United States and other countries, Abbott’s businesses have experienced downward pressure on certain product pricing.
Economic, Geopolitical and Industry Risks Abbott is subject to cost containment efforts that could cause a reduction in future revenues and operating income. In the United States and other countries, Abbott’s businesses have experienced downward pressure on certain product pricing.
Removed
Further, Abbott has experienced, and may continue to experience, availability issues with some services, operations, and materials used in its products. To date, Abbott has been able to manage the various supply chain challenges without significant supply disruption or shortage for services, raw materials and supplies.
Added
While Abbott has taken and will continue to take actions to mitigate the risks of disruptions to its global supply chain, disruptions to it could negatively affect Abbott's results of operations.
Removed
Risk Factors.” On January 30, 2023, the U.S. announced that it plans to end the public health emergency on May 11, 2023.
Added
These effects could cause a deterioration of Abbott’s credit rating, result in increased borrowing costs and interest expense, and decrease liquidity.
Removed
Further, the demand for COVID-19 tests has been volatile over the last two years as the number of COVID-19 cases has fluctuated during the period. Abbott expects the COVID-19 pandemic to shift to an endemic state in 2023, which would likely result in significantly lower demand for COVID-19 tests.
Added
Abbott’s products are subject to rigorous regulation by the FDA and numerous international, supranational, federal, and state authorities.
Removed
Due to the unpredictability of the COVID-19 pandemic, including how and when it will shift to an endemic state, the extent to which COVID-19 will continue to have a material effect on Abbott’s business, financial condition or results of operations is uncertain.
Added
Any of these events could have a material adverse effect on Abbott’s profitability and financial condition. 12 Table of Contents New products and technological advances by Abbott’s competitors may negatively affect Abbott’s results of operations. Abbott’s products face intense competition from competitors' products and technological advances.
Removed
Information on Abbott’s hedging arrangements is contained in Note 11 to the consolidated financial statements in this report. 13 Table of Contents Deterioration in the economic condition and credit quality of certain countries may negatively affect Abbott’s results of operations. Unfavorable economic conditions in certain countries may increase the time it takes to collect outstanding trade receivables.
Added
Further, the development of new technology, health care products and medicines, and the development of new treatments for disease could significantly change the competitive landscape of the health care industry and negatively impact the demand for certain Abbott products. Abbott cannot predict with certainty the timing or impact of the introduction of competitors’ products and technological advances.
Added
Adverse changes in tax laws, regulations and interpretations, both in the U.S. and internationally, could have a material adverse effect on Abbott’s effective tax rate, financial condition and results of operations. Abbott is a large, global corporation, and changes in tax laws, regulations or interpretations could adversely affect Abbott’s overall tax liabilities.
Added
Changes in tax laws, regulations or interpretations, both in the U.S. and internationally, such as the two-pillared plan proposed by the Organization for Economic Cooperation & Development (OECD), could materially adversely affect Abbott’s effective tax rate, financial condition and results of operations.
Added
A discussion on the OECD proposals and their potential impact on Abbott’s business in the future is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.
Added
Abbott is unable to predict what changes to the tax laws of the U.S. or other jurisdictions may be proposed or enacted in the future or what impact such changes would have on its business. Deterioration in the economic condition and credit quality of certain countries may negatively affect Abbott’s results of operations.
Added
The resolution and long-term impact of this matter are uncertain and difficult to predict. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Form 10-K contains forward-looking statements that are based on management’s current expectations, estimates, and projections.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2022, Abbott owned or leased properties totaling approximately 43 million square feet, of which approximately 65% is owned by Abbott. Abbott’s principal corporate offices are located in Illinois and are owned by Abbott. Abbott operates 88 manufacturing facilities globally. Abbott’s facilities are deemed suitable and provide adequate productive capacity.
Biggest changeITEM 2. PROPERTIES As of December 31, 2023, Abbott owned or leased properties totaling approximately 44 million square feet, of which approximately 65% is owned by Abbott. Abbott’s principal corporate offices are located in Illinois and are owned by Abbott. Abbott operates 90 manufacturing facilities globally. Abbott’s facilities are deemed suitable and provide adequate productive capacity.
Abbott also has research and development facilities in various other countries, including Colombia, India, Singapore, Spain, and the United Kingdom. There are no material encumbrances on the properties. 15 Table of Contents
Abbott also has research and development facilities in various other countries, including Colombia, India, Singapore, Spain, and the United Kingdom. There are no material encumbrances on the properties. 17 Table of Contents
The manufacturing facilities are used by Abbott’s reportable segments as follows: Reportable Segments Manufacturing Sites Medical Devices 28 Diagnostic Products 22 Established Pharmaceutical Products 24 Nutritional Products 14 Worldwide Total 88 Abbott’s research and development facilities in the United States are primarily located in California, Illinois, Minnesota, New Jersey, and Ohio.
The manufacturing facilities are used by Abbott’s reportable segments as follows: Reportable Segments Manufacturing Sites Medical Devices 31 Diagnostic Products 21 Established Pharmaceutical Products 24 Nutritional Products 14 Worldwide Total 90 Abbott’s research and development facilities in the United States are primarily located in California, Illinois, Minnesota, New Jersey, and Ohio.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeDistrict Court for the District of Delaware alleging that DexCom breached the parties' 2014 Settlement and License Agreement by asserting infringement of patents against Abbott that DexCom previously licensed to Abbott. In the U.S., DexCom’s patent infringement case is stayed pending resolution of Abbott’s breach of license case, which is currently set for trial on July 10, 2023.
Biggest changeIn December 2021, Abbott filed a breach of contract suit against DexCom in the U.S. District Court for the District of Delaware alleging that DexCom breached the parties' 2014 Settlement and License Agreement by asserting infringement of patents against Abbott that DexCom previously licensed to Abbott.
In addition, in December 2021, a purported class of Canadian preterm infants filed suit in British Columbia and, in October 2022, a purported class of Israeli preterm infants filed suit in Tel Aviv, both of which make similar allegations as those made in the United States against Abbott. These plaintiffs seek various damages, including punitive damages.
In addition, in December 2021, a purported class of Canadian preterm infants filed suit in British Columbia and, in October 2022, a purported class of Israeli preterm infants filed suit in Tel Aviv, both of which make similar allegations as those made in the United States against Abbott. These plaintiffs seek various damages.
In January 2023, Abbott received a civil investigative demand from the United States Federal Trade Commission seeking information in connection with its investigation of companies who participate in bids for Women, Infants, and Children infant formula contracts. In addition, multiple civil lawsuits have been filed against Abbott regarding Abbott’s manufacturing of certain powder infant formula products.
In January 2023, Abbott received a civil investigative demand from the United States Federal Trade Commission seeking information in connection with its investigation of companies who participate in bids for Women, Infants, and Children infant formula contracts. In addition, multiple civil lawsuits have been filed against Abbott relating to Abbott’s manufacturing of certain powder infant formula products.
As of January 31, 2023, there were 399 lawsuits pending in federal and state courts in which Abbott is a party. The plaintiffs seek various damages, including punitive damages. In April 2022, the U.S. Judicial Panel on Multidistrict Litigation ordered all federal court cases consolidated for pretrial purposes in the U.S. District Court for the Northern District of Illinois.
As of January 31, 2024, there were 993 lawsuits pending in federal and state courts in which Abbott is a party. The plaintiffs seek various damages, including punitive damages. In April 2022, the U.S. Judicial Panel on Multidistrict Litigation ordered all federal court cases consolidated for pretrial purposes in the U.S. District Court for the Northern District of Illinois.
ITEM 3. LEGAL PROCEEDINGS Abbott is involved in various claims, legal proceedings, and investigations, including (as of January 31, 2023) those described below.
ITEM 3. LEGAL PROCEEDINGS Abbott is involved in various claims, legal proceedings, and investigations, including (as of January 31, 2024) those described below.
Many of the lawsuits name another infant formula manufacturer as a co-defendant. In June and July 2021, DexCom, Inc. (DexCom) initiated patent infringement litigation against Abbott over certain of Abbott's continuous glucose monitoring products, including those under the FreeStyle brand, in the U.S. District Court for the Eastern District of Texas and in the Regional Court of Mannheim in Germany.
In January 2024, the Israeli lawsuit was dismissed without prejudice. Many of the lawsuits name another infant formula manufacturer as a co-defendant. In June and July 2021, DexCom, Inc. (DexCom) initiated patent infringement litigation against Abbott over certain of Abbott's continuous glucose monitoring products, including those under the FreeStyle brand, in the U.S.
Abbott’s U.S. patent infringement trial against DexCom is currently scheduled for October 23, 2023. In November 2022, Abbott learned that the United States Department of Justice, through the United States Attorney’s Office for the Western District of Michigan, is conducting a criminal investigation related to Abbott’s manufacturing of infant formula.
In November 2022, Abbott learned that the United States Department of Justice, through the United States Attorney’s Office for the Western District of Michigan, is conducting a criminal investigation related to Abbott’s manufacturing of infant formula.
In both jurisdictions, DexCom seeks injunctive relief and monetary damages. In all cases, Abbott asserts that it has a license to each of Dexcom' s asserted patents and that the patents are invalid and not infringed. In July 2021, Abbott sued DexCom for patent infringement over certain of DexCom's continuous glucose monitoring products in the U.S.
District Court for the Eastern District of Texas and in the Regional Court of Mannheim in Germany. In both jurisdictions, DexCom seeks injunctive relief and monetary damages. In all cases, Abbott asserts that it has a license to each of Dexcom' s asserted patents and that the patents are invalid and not infringed.
District Court for the District of Delaware, the Regional Courts of Mannheim and Dusseldorf in Germany, and the High Court of Justice in the United Kingdom. Abbott seeks injunctive relief and monetary damages. In December 2021, Abbott filed a breach of contract suit against DexCom in the U.S.
In July 2021, Abbott sued DexCom for patent infringement over certain of DexCom’s continuous glucose monitoring products in the U.S. District Court for the District of Delaware, the Regional Courts of Mannheim and Dusseldorf in Germany, and the High Court of Justice in the United Kingdom. Abbott seeks injunctive relief and monetary damages.
Added
In July 2023, Abbott was found to have a license to certain of DexCom’s patents in Abbott’s breach of contract suit. In November 2023, the U.S. Patent and Trademark Office found some of DexCom’s asserted patent claims invalid. Throughout 2023, Abbott and DexCom filed additional patent infringement actions in the U.S., Germany, the U.K., Spain, and the Unified Patent Court.
Added
DexCom’s first U.S. patent infringement trial on its remaining claims is scheduled for March 2025. Abbott’s first U.S. patent infringement trial against DexCom is scheduled for March 2024.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeElected Corporate Officer — 2008. Joseph Manning, 54 2021 to present — Executive Vice President, Nutritional Products. 2017 to 2021 — Senior Vice President, International Nutrition. Elected Corporate Officer — 2015. 17 Table of Contents Mary K. Moreland, 56 2019 to present — Executive Vice President, Human Resources. 2013 to 2019 — Divisional Vice President, Compensation, Benefits and HR M&A.
Biggest changeMoreland, 57 2019 to present — Executive Vice President, Human Resources. 2013 to 2019 — Divisional Vice President, Compensation, Benefits and HR M&A. Elected Corporate Officer — 2019. Louis H. Morrone, 47 2023 to present — Executive Vice Presi dent, Core Diagnostics. 2021 to 2023 — Senior Vice Presi dent, Rapid Diagnostics. 2017 to 2021 — Vice President, Transfusion Medicine.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 16 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Executive officers of Abbott are elected annually by the board of directors. Each executive officer holds office until a successor has been duly elected or appointed and qualified or until the officer’s death, resignation, or removal.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 18 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Executive officers of Abbott are elected annually by the board of directors. Each executive officer holds office until a successor has been duly elected or appointed and qualified or until the officer’s death, resignation, or removal.
Ford, 49 2021 to present — Chairman of the Board and Chief Executive Officer, and Director. 2020 to 2021 — President and Chief Executive Officer, and Director. 2018 to 2020 — President and Chief Operating Officer, and Director since 2019. 2015 to 2018 — Executive Vice President, Medical Devices. Elected Corporate Officer — 2008. Hubert L.
Ford, 50 2021 to present — Chairman of the Board and Chief Executive Officer, and Director. 2020 to 2021 — President and Chief Executive Officer, and Director. 2018 to 2020 — President and Chief Operating Officer, and Director since 2019. 2015 to 2018 — Executive Vice President, Medical Devices. Elected Corporate Officer — 2008. Hubert L.
Vacancies may be filled at any time by the board. Any executive officer may be removed by the board of directors when, in its judgment, removal would serve the best interests of Abbott. Abbott’s executive officers, their ages as of February 17, 2023, and the dates of their first election as officers of Abbott are listed below.
Vacancies may be filled at any time by the board. Any executive officer may be removed by the board of directors when, in its judgment, removal would serve the best interests of Abbott. Abbott’s executive officers, their ages as of February 16, 2024, and the dates of their first election as officers of Abbott are listed below.
Earnhardt, 53 2019 to present — Executive Vice President, Medical Devices. 2008 to 2019 — President, CEO, and Director, Intersect ENT (a medical technology company focused on developing treatments for ear, nose and throat conditions). Elected Corporate Officer — 2019. Robert E.
Earnhardt, 54 2023 to present — Executive Vice President and Group President, Medical Devices. 2019 to 2023 — Executive Vice President, Medical Devices. 2008 to 2019 — President, CEO, and Director, Intersect ENT (a medical technology company focused on developing treatments for ear, nose and throat conditions). Elected Corporate Officer — 2019. Robert E.
Allen, 57 2013 to present — Executive Vice President, General Counsel and Secretary. Elected Corporate Officer — 2012. John M. Capek, 61 2015 to present — Executive Vice President, Ventures. Elected Corporate Officer — 2006. Lisa D.
Allen, 58 2013 to present — Executive Vice President, General Counsel and Secretary. Elected Corporate Officer — 2012. Lisa D.
Elected Corporate Officer — 2019. Daniel Salvadori, 44 2021 to present — Executive Vice President and Group President, Established Pharmaceuticals and Nutritional Products. 2017 to 2021 — Executive Vice President, Nutritional Products. Elected Corporate Officer — 2014. Andrea Wainer, 54 2019 to present — Executive Vice President, Rapid and Molecular Diagnostics. 2015 to 2019 — Vice President, Molecular Diagnostics.
Elected Corporate Officer — 2017 . 19 Table of Contents Daniel Salvadori, 45 2021 to present — Executive Vice President and Group President, Established Pharmaceuticals and Nutritional Products. 2017 to 2021 — Executive Vice President, Nutritional Products. Elected Corporate Officer — 2014.
Boudreau, 50 2020 to present — Vice President, Finance a nd Controller. 2017 to 2020 — Divisional Vice President, Controller, Medical Devices. Elected Corporate Officer — 2020 . 19 Table of Contents PART II
Boudreau, 51 2023 to present — Senior Vice President, Finance a nd Chief Financial Officer. 2020 to 2023 — Vice President, Finance a nd Controller. 2017 to 2020 — Divisional Vice President, Controller, Medical Devices. Elected Corporate Officer — 2020 . John A.
Funck, Jr., 61 2020 to present — Executive Vice President, Finance and Chief Financial Officer. 2018 to 2020 — Senior Vice President, Finance and Controller. 2013 to 2018 — Vice President, Controller. Elected Corporate Officer — 2005. John F. Ginascol, 64 2019 to present — Executive Vice President, Core Diagnostics. 2008 to 2019 — Vice President, Nutrition, Supply Chain.
Funck, Jr., 62 2023 to present — Executive Vice President, Finance. 2020 to 2023 — Executive Vice President, Finance and Chief Financial Officer. 2018 to 2020 — Senior Vice President, Finance and Controller. 2013 to 2018 — Vice President, Controller. Elected Corporate Officer — 2005. Mary K.
Removed
Elected Corporate Officer — 2015. Gregory A. Ahlberg, 56 2020 to present — Senior Vice President, Core Laboratory Diagnostics, Commercial Operations. 2017 to 2020 —Vice President, Diagnostics, Commercial Operations, Europe, Middle East and Africa. Elected Corporate Officer — 2017. Christopher J. Calamari, 52 2021 to present — Senior Vice President, U.S. Nutrition. 2017 to 2021 — Vice President, Pediatric Nutrition.
Added
Andrea Wainer, 55 2019 to present — Executive Vice President, Rapid and Molecular Diagnostics. 2015 to 2019 — Vice President, Molecular Diagnostics. Elected Corporate Officer — 2015. Philip P.
Removed
Elected Corporate Officer — 2017. Michael D. Dale, 63 2019 to present — Senior Vice President, Structural Heart. 2017 to 2019 — Vice President, Structural Heart. Elected Corporate Officer — 2017. Sammy Karam, 61 2019 to present — Senior Vice President, Established Pharmaceuticals, Emerging Markets. 2014 to 2019 — Divisional Vice President, Global Marketing Commercial Execution, Established Pharmaceuticals.
Added
McCoy, Jr., 54 2023 to present — Vice President, Finance a nd Controller. 2021 to 2023 — Vice President, Treasurer. 2018 to 2021 — Divisional Vice President, Controller, Rapid Diagnostics. Elected Corporate Officer — 2021 . 20 Table of Contents PART II
Removed
Elected Corporate Officer — 2019. Fernando Mateus, 48 2021 to present — Senior Vice Pre sident, International Nutrition. 2018 to 2021 — Divisional Vice President, EURISA, Abbott International Nutrition. 2016 to 2018 — Chief Executive Officer, Exeltis USA, Inc. (a subsidiary of Exeltis, a women’s health company focused on respiratory, dermatology, and endocrinology).
Removed
Elected Corporate Officer — 202 1. 18 Table of Contents Louis H. Morrone, 46 2021 to present — Senior Vice Presi dent, Rapid Diagnostics. 2017 to 2021 — Vice President, Transfusion Medicine. Elected Corporate Officer — 2017 . Michael J.
Removed
Pederson, 61 2021 to present — Senior Vice Pres ident, Electrophysiology. 2019 to 2021 — Senior Vice President, Electrophysiology and Heart Failure. 2017 to 2019 — Senior Vice President, Cardiac Arrhythmias and Heart Failure. Elected Corporate Officer — 201 7. Julie L. Tyler, 53 2021 to present — Senior Vice Pres ident, Abbott Vascular.
Removed
April 2021 to July 2021 — Divisional Vice President, U.S. Commercial, Abbott Diabetes Care. 2019 to 2021 — Divisional Vice President, Global Marketing, Abbott Vascular. 2017 to 2019 — Divisional Vice President, U.S. Sales and Marketing Endovascular, Abbott Vascular. Elected Corporate Officer — 202 1. Jared L. Watkin, 55 2015 to present — Senior Vi ce President, Diabetes Care.
Removed
Elected Corporate Officer — 2015. Alejandro D. Wellisch, 48 2017 to present — Senior Vice President, Established Pharmaceuticals, Latin America. Elected Corporate Officer — 201 7. Randel W. Woodgrift, 61 2019 to present — Senior Vice Presid ent, Cardio Rhythm Management. 2017 to 2019 — Vice President, Global Operations, Cardiovascular and Neuromodulation. Elected Corporate Officer — 2015 . Philip P.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−1 removed1 unchanged
Biggest changeAbbott intends to apply to the DCEO for a renewal of its HIB designation. Dividends paid by a corporation that is designated as a HIB and conducts business in a foreign trade zone may be eligible for a subtraction from base income for Illinois income tax purposes.
Biggest changeDividends paid by a corporation that is designated as a HIB and conducts business in a foreign trade zone may be eligible for a subtraction from base income for Illinois income tax purposes. Abbott certified that the HIB requirements were met for the calendar year ending December 31, 2023. If you have any questions, please contact your tax advisor.
Outside the United States, Abbott’s shares are listed on the SIX Swiss Exchange. Shareholders There were 33,984 shareholders of record of Abbott common shares as of January 31, 2023. Tax Information for Shareholders The Illinois Department of Commerce and Economic Opportunity (DCEO) designated Abbott as an Illinois High Impact Business (HIB) through June 2023.
Outside the United States, Abbott’s shares are listed on the SIX Swiss Exchange. Shareholders There were 32,449 shareholders of record of Abbott common shares as of January 31, 2024. Tax Information for Shareholders The Illinois Department of Commerce and Economic Opportunity (DCEO) has designated Abbott as an Illinois High Impact Business (HIB) through June 2043.
(2) On December 10, 2021, Abbott announced that its board of directors authorized the repurchase of up to $5 billion of Abbott common shares, from time to time. ITEM 6. [RESERVED] 20 Table of Contents
(2) On December 10, 2021, Abbott announced that its board of directors authorized the repurchase of up to $5 billion of Abbott common shares, from time to time.
Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2022 — October 31, 2022 2,000,000 (1) $ 98.258 2,000,000 $ 2,919,279,803 (2) November 1, 2022 — November 30, 2022 800,000 (1) $ 98.103 800,000 $ 2,840,797,543 (2) December 1, 2022 — December 31, 2022 3,750,000 (1) $ 108.455 3,750,000 $ 2,434,092,348 (2) Total 6,550,000 (1) $ 104.077 6,550,000 $ 2,434,092,348 (2) _______________________________________________________ (1) These shares do not include the shares surrendered to Abbott to satisfy tax withholding obligations in connection with the vesting of restricted stock or restricted stock units.
Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2023 — October 31, 2023 — (1) $ — — $ 1,709,092,863 (2) November 1, 2023 — November 30, 2023 — (1) $ — — $ 1,709,092,863 (2) December 1, 2023 — December 31, 2023 2,772,057 (1) $ 108.223 2,772,057 $ 1,409,092,884 (2) Total 2,772,057 (1) $ 108.223 2,772,057 $ 1,409,092,884 (2) _______________________________________________________ (1) These shares do not include the shares surrendered to Abbott to satisfy tax withholding obligations in connection with the vesting of restricted stock or restricted stock units.
Removed
Abbott certified that the HIB requirements were met for the calendar year ending December 31, 2022. If you have any questions, please contact your tax advisor.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese accruals represent management’s best estimate of probable loss, as defined by FASB ASC No. 450, “Contingencies.” 25 Table of Contents Results of Operations Sales The following table details the components of sales growth by reportable segment for the last two years: Components of % Change Total % Change Price Volume Exchange Total Net Sales 2022 vs. 2021 1.3 (0.3) 6.7 (5.1) 2021 vs. 2020 24.5 (1.5) 24.4 1.6 Total U.S. 2022 vs. 2021 9.0 (0.6) 9.6 — 2021 vs. 2020 27.8 (1.9) 29.7 — Total International 2022 vs. 2021 (3.5) — 4.7 (8.2) 2021 vs. 2020 22.5 (1.3) 21.2 2.6 Established Pharmaceutical Products Segment 2022 vs. 2021 4.1 3.7 6.9 (6.5) 2021 vs. 2020 9.6 4.2 6.2 (0.8) Nutritional Products Segment 2022 vs. 2021 (10.1) 7.4 (13.6) (3.9) 2021 vs. 2020 8.5 1.0 6.7 0.8 Diagnostic Products Segment 2022 vs. 2021 6.0 (5.5) 15.9 (4.4) 2021 vs. 2020 44.8 (6.2) 48.9 2.1 Medical Devices Segment 2022 vs. 2021 2.2 (0.2) 8.3 (5.9) 2021 vs. 2020 21.9 (0.9) 20.3 2.5 The increase in Total Net Sales in 2022 reflects growth in demand for Abbott’s rapid diagnostic tests to detect COVID-19 as well as growth in the Established Pharmaceutical Products and Medical Devices segments, partially offset by lower Nutritional Products sales.
Biggest changeThese accruals represent management’s best estimate of probable loss, as defined by FASB ASC No. 450, “Contingencies.” 26 Table of Contents Results of Operations Sales The following table details the components of sales growth by reportable segment for the last two years: Components of % Change Total % Change Price Volume Exchange Total Net Sales 2023 vs. 2022 (8.1) 2.6 (8.7) (2.0) 2022 vs. 2021 1.3 (0.3) 6.7 (5.1) Total U.S. 2023 vs. 2022 (14.8) 1.1 (15.9) — 2022 vs. 2021 9.0 (0.6) 9.6 — Total International 2023 vs. 2022 (3.3) 3.7 (3.5) (3.5) 2022 vs. 2021 (3.5) — 4.7 (8.2) Established Pharmaceutical Products Segment 2023 vs. 2022 3.1 6.0 4.9 (7.8) 2022 vs. 2021 4.1 3.7 6.9 (6.5) Nutritional Products Segment 2023 vs. 2022 9.3 11.4 0.2 (2.3) 2022 vs. 2021 (10.1) 7.4 (13.6) (3.9) Diagnostic Products Segment 2023 vs. 2022 (39.4) (0.9) (37.3) (1.2) 2022 vs. 2021 6.0 (5.5) 15.9 (4.4) Medical Devices Segment 2023 vs. 2022 14.1 1.0 14.1 (1.0) 2022 vs. 2021 2.2 (0.2) 8.3 (5.9) The decrease in total net sales in 2023 reflects the decline in demand for Abbott’s rapid diagnostic tests to detect COVID-19, partially offset by higher sales in the Medical Devices, Established Pharmaceutical Products and Nutritional Products segments.
Interest Expense and Interest (Income) Interest expense, net decreased $115 million in 2022 due t o the impact of higher interest rates and cash and short-term investment balances on interest income and the repayment of debt in the first quarter of 2022 partially offset by the impact of interest rate hedge contracts related to certain fixed-rate debt.
Interest expense, net decreased $115 million in 2022 due t o the impact of higher interest rates and cash and short-term investment balances on interest income and the repayment of debt in the first quarter of 2022, partially offset by the impact of interest rate hedge contracts related to certain fixed-rate debt.
Depending on the product, the activities focus on development of new data, markets, formulations, delivery systems, or indications. 33 Table of Contents Medical Devices — Abbott’s research and development programs focus on: • Cardiac Rhythm Management – Development of next-generation rhythm management technologies, including advanced communication capabilities and leadless pacing therapies. • Heart Failure – Continued enhancements to Abbott’s mechanical circulatory support and pulmonary artery pressure systems, including enhanced clinical performance and usability. • Electrophysiology – Development of next-generation technologies in the areas of ablation, diagnostic, mapping, and visualization and recording. • Vascular – Development of next-generation technologies for use in coronary and peripheral vascular procedures. • Structural Heart – Development of transcatheter and surgical devices for the repair and replacement of heart valves, and occlusion therapies for congenital heart defects and stroke-risk reduction. • Neuromodulation – Development of clinical evidence and next-generation technologies leveraging digital health to support improved patient clinical outcomes, physician engagement, and expanded indications in the treatment of chronic pain, movement disorders and other indications. • Diabetes Care – Develop enhancements and additional indications for the FreeStyle Libre platform of continuous glucose monitoring products to help patients improve their ability to manage diabetes and for use beyond diabetes.
Depending on the product, the activities focus on development of new data, markets, formulations, delivery systems, or indications. 34 Table of Contents Medical Devices — Abbott’s research and development programs focus on: • Cardiac Rhythm Management – Development of next-generation rhythm management technologies, including advanced communication capabilities and leadless pacing therapies. • Heart Failure – Continued enhancements to Abbott’s mechanical circulatory support and pulmonary artery pressure systems, including enhanced clinical performance and usability. • Electrophysiology – Development of next-generation technologies in the areas of ablation, diagnostic, mapping, and visualization and recording. • Vascular – Development of next-generation technologies for use in coronary and peripheral vascular procedures. • Structural Heart – Development of transcatheter and surgical devices for the repair and replacement of heart valves, and occlusion therapies for congenital heart defects and stroke-risk reduction. • Neuromodulation – Development of clinical evidence and next-generation technologies leveraging digital health to support improved patient clinical outcomes, physician engagement, and expanded indications in the treatment of chronic pain, movement disorders and other indications. • Diabetes Care – Develop enhancements and additional indications for the FreeStyle Libre platform of continuous glucose monitoring products to help patients improve their ability to manage diabetes and for use beyond diabetes.
Food and Drug Administration (FDA) on the steps necessary to resume production and maintain the Sturgis facility and operations. On July 1, Abbott restarted partial production at the facility beginning with its specialty formula EleCare ® and metabolic formulas. Subsequently, Abbott restarted Similac ® production. The consent decree does not affect any other Abbott plants or operations.
Food and Drug Administration (FDA) on the steps necessary to resume production and maintain the Sturgis facility and operations. On July 1, 2022, Abbott restarted partial production at the facility beginning with its specialty formula EleCare ® and metabolic formulas. Subsequently, Abbott restarted Similac ® production. The consent decree does not affect any other Abbott plants or operations.
Submission of a separate regulatory filing is not required for Class I products. Class II devices typically require pre-market notification to the FDA through a regulatory filing known as a 510(k) submission. Most Class III products are subject to the FDA’s Premarket Approval (PMA) requirements.
Submission of a separate regulatory filing is not required for Class I products. Class II products typically require pre-market notification to the FDA through a regulatory filing known as a 510(k) submission. Most Class III products are subject to the FDA’s Premarket Approval (PMA) requirements.
Over the next several years, Abbott plans to expand its product portfolio in key therapeutic areas with the aim of addressing the health needs of more people in emerging markets and being among the first to launch new off-patent and differentiated medicines.
Over the next several years, Abbott plans to expand its product portfolio in key therapeutic areas and biosimilars with the aim of addressing the health needs of more people in emerging markets and being among the first to launch new off-patent and differentiated medicines.
These actions included the shipment of infant formula powder into the U.S. from Abbott's FDA-registered facility in Ireland; prioritization of infant formula production at its Columbus, Ohio facility; conversion of other liquid manufacturing lines into manufacturing Similac liquid ready-to-feed product; increased production of powder infant formula at its Casa Grande, Arizona manufacturing site; and importation of product from its facility in Spain as permitted by the FDA.
The 2022 actions included the shipment of infant formula powder into the U.S. from Abbott's FDA-registered facility in Ireland; prioritization of infant formula production at its Columbus, Ohio facility; conversion of other liquid manufacturing lines into manufacturing Similac liquid ready-to-feed product; increased production of powder infant formula at its Casa Grande, Arizona manufacturing site; and importation of product from its facility in Spain as permitted by the FDA.
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 the measurement of net sales and costs is impacted by foreign currency translation. Sales in international markets comprise 58 percent of consolidated net sales.
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 the measurement of net sales and costs is impacted by foreign currency translation. Sales in international markets comprise 61 percent of consolidated net sales.
A substantial portion of Abbott’s cash and cash equivalents at December 31, 2022, is held by Abbott affiliates outside of the U.S. If these funds were needed for operations in the U.S., Abbott does not expect to incur significant additional income taxes in the future to repatriate these funds.
A substantial portion of Abbott’s cash and cash equivalents at December 31, 2023, is held by Abbott affiliates outside of the U.S. If these funds were needed for operations in the U.S., Abbott does not expect to incur significant additional income taxes in the future to repatriate these funds.
The decrease in 2022 reflects the impact of the voluntary infant product recall and Sturgis manufacturing stoppage as well as the prioritization of infant formula sales related to the WIC Program in the Nutritional business. The decrease also reflects higher manufacturing and supply chain costs across Abbott's businesses, including inflation, commodities and distribution expenses.
In 2022, the decrease reflected the impact of the voluntary infant product recall and Sturgis manufacturing stoppage, as well as the prioritization of infant formula sales related to the WIC Program in the Nutritional business. The decrease also reflected higher manufacturing and supply chain costs across Abbott's businesses, including inflation, commodities and distribution expenses.
Other Class III products, such as those used to screen blood, require the submission and approval of a Biological License Application (BLA). 32 Table of Contents In the European Union (EU), diagnostic products are also categorized into different categories and the regulatory process, which has been governed by the European In Vitro Diagnostic Medical Device Directive, depends upon the category, with certain product categories requiring review and approval by an independent company, known as a Notified Body, before the manufacturer can affix a CE mark to the product to declare conformity to the Directive.
Other Class III products, such as those used to screen blood, require the submission and approval of a Biological License Application (BLA). 33 Table of Contents In the European Union (EU), diagnostic products are also categorized into different categories and the regulatory process, which had been governed by the European In Vitro Diagnostic Medical Device Directive, depends upon the category, with certain product categories requiring review and approval by an independent company, known as a Notified Body, before the manufacturer can affix a CE mark to the product to declare conformity to the Directive.
Abbott plans to manage its portfolio of projects to achieve research and development spending that will be competitive in each of the businesses in which it participates, and such spending is targeted at approximately 7 percent of total Abbott sales in 2023.
Abbott plans to manage its portfolio of projects to achieve research and development spending that will be competitive in each of the businesses in which it participates, and such spending is targeted at approximately 7 percent of total Abbott sales in 2024.
Application of these rules requires a significant amount of judgment. In the U.S., Abbott’s federal income tax returns through 2016 were settled as of December 31, 2022. Undistributed foreign earnings remain indefinitely reinvested in foreign operations.
Application of these rules requires a significant amount of judgment. In the U.S., Abbott’s federal income tax returns through 2016 were settled as of December 31, 2023. Undistributed foreign earnings remain indefinitely reinvested in foreign operations.
The coronavirus (COVID-19) pandemic affected Abbott’s diversified health care businesses in various ways over the 2020 through 2022 period. Abbott’s Diagnostics segment experienced the most significant change in sales from 2020 to 2022 as a result of the COVID-19 pandemic.
Over the period from 2020 through 2023, the coronavirus (COVID-19) pandemic affected Abbott’s diversified health care businesses in various ways. Abbott’s Diagnostics segment experienced the most significant change in sales from 2020 to 2023 as a result of the COVID-19 pandemic.
The decrease in Net cash from operating activities in 2022 was primarily due to the unfavorable cash flow impact of an increased investment in working capital partially offset by reduced expenditures related to restructuring actions and lower cash payments for income taxes.
The decrease in Net cash from operating activities in 2022 as compared to 2021 was primarily due to the unfavorable cash flow impact of an increased investment in working capital, partially offset by reduced expenditures related to restructuring actions and lower cash payments for income taxes.
For government agency programs, the calculation of a rebate involves interpretations of relevant regulations, which are subject to challenge or change in interpretation. 24 Table of Contents Income Taxes — Abbott operates in numerous countries where its income tax returns are subject to audits and adjustments.
For government agency programs, the calculation of a rebate involves interpretations of relevant regulations, which are subject to challenge or change in interpretation. Income Taxes — Abbott operates in numerous countries where its income tax returns are subject to audits and adjustments.
On May 27, 2021, Abbott management approved a restructuring plan related to its Diagnostic Products segment to align its manufacturing network for COVID-19 diagnostic tests with changes in the second quarter of 2021 in projected testing demand driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, the accelerated rollout of COVID-19 vaccines globally and the U.S. health authority’s updated guidance on testing for fully vaccinated individuals.
In 2021, Abbott management approved a restructuring plan related to its Diagnostic Products segment to align its manufacturing network for COVID-19 diagnostic tests with changes in the second quarter of 2021 in projected testing demand driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, 31 Table of Contents the accelerated rollout of COVID-19 vaccines globally and the U.S. health authority’s updated guidance on testing for fully vaccinated individuals.
In Vascular, 2022 sales decreased 1.0 percent, excluding the impact of exchange, as higher endovascular sales were offset by the negative effect of lower average selling prices globally on traditional DES and other coronary products and a lower recovery of percutaneous coronary intervention (PCI) procedures which impacted the coronary business.
In 2022, Vascular sales decreased 1.0 percent, excluding the impact of foreign exchange, as higher endovascular sales were offset by the negative effect of lower average selling prices globally on traditional drug eluting stents (DES) and other coronary products and a lower recovery of percutaneous coronary intervention (PCI) procedures which impacted the coronary business.
Economic, competitive, governmental, technological and other factors that may affect Abbott’s operations are discussed in Item 1A, Risk Factors. 37 Table of Contents
Economic, competitive, governmental, technological and other factors that may affect Abbott’s operations are discussed in Item 1A, Risk Factors. 38 Table of Contents
There were no delays in Abbott’s 2022 research and development activities that are expected to have a material impact on operations.
There were no delays in Abbott’s 2023 research and development activities that are expected to have a material impact on operations.
Core Laboratory Diagnostics — Abbott continues to commercialize its next-generation blood and plasma screening, immunoassay, clinical chemistry and hematology systems, along with assays, including a focus on unmet medical need, in various areas including but not limited to infectious disease, cardiac care, metabolics, oncology, and neurologic assays as well as informatics solutions to help optimize diagnostics laboratory performance and automation solutions to increase efficiency in laboratories.
Core Laboratory Diagnostics — Abbott continues to commercialize its next-generation blood and plasma screening, immunoassay, clinical chemistry and hematology systems, along with assays, including a focus on unmet medical needs, in various areas including infectious disease, cardiac care, metabolics, oncology, and neurologic assays as well as informatics solutions to help optimize diagnostics laboratory performance and automation solutions to increase efficiency in laboratories.
Operating leases — As of December 31, 2022, estimated contractual obligations for operating lease payments were $1.341 billion, with $258 million due within 12 months. In addition, Abbott enters into purchase commitments in the normal course of business to meet operational and capital expenditure requirements. The majority of outstanding purchase commitments generally do not extend past one year.
Operating leases — As of December 31, 2023, estimated contractual obligations for operating lease payments were $1.362 billion, with $278 million due within 12 months. In addition, Abbott enters into purchase commitments in the normal course of business to meet operational and capital expenditure requirements. The majority of outstanding purchase commitments generally do not extend past one year.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Review Abbott’s revenues are derived primarily from the sale of a broad line of health care products under short-term receivable arrangements. Abbott’s primary products are medical devices, diagnostic testing products, nutritional products and branded generic pharmaceuticals.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Review Abbott’s revenues are derived primarily from the sale of a broad line of health care products, which include medical devices, diagnostic testing products, nutritional products and branded generic pharmaceuticals. These products are sold under short-term receivable arrangements.
At December 31, 2022, Abbott had WIC business in 37 states. Historically, adjustments to prior years’ rebate accruals have not been material to net income. Abbott employs various techniques to verify the accuracy of claims submitted to it, and where possible, works with the organizations submitting claims to gain insight into changes that might affect the rebate amounts.
At December 31, 2023, Abbott had WIC business in 40 states. Historically, adjustments to prior years’ rebate accruals have not been material to net earnings. Abbott employs various techniques to verify the accuracy of claims submitted to it, and where possible, works with the organizations submitting claims to gain insight into changes that might affect the rebate amounts.
Abbott estimates the range of possible loss to be from approximately $40 million to $50 million for its legal proceedings and environmental exposures. Accruals of approximately $45 million have been recorded at December 31, 2022 for these proceedings and exposures.
Abbott estimates the range of possible loss to be from approximately $30 million to $45 million for its legal proceedings and environmental exposures. Accruals of approximately $40 million have been recorded at December 31, 2023 for these proceedings and exposures.
Critical Accounting Policies Sales Rebates — In 2022, approximately 45 percent of Abbott’s consolidated gross revenues were subject to various forms of rebates and allowances that Abbott recorded as reductions of revenues at the time of sale. Most of these rebates and allowances in 2022 are in the Nutritional Products and Diabetes Care businesses.
Critical Accounting Policies Sales Rebates — In 2023, 49 percent of Abbott’s consolidated gross revenues were subject to various forms of rebates and allowances that Abbott recorded as reductions of revenues at the time of sale. Most of these rebates and allowances in 2023 are in the Nutritional Products and Diabetes Care businesses.
In 2022, while procedure volumes across Abbott’s cardiovascular and neuromodulation businesses were negatively impacted by new surges of COVID-19 in various geographies as well as intermittent COVID-19 lockdown restrictions in China and healthcare staffing challenges throughout the year, overall volumes improved in several businesses versus 2021.
In 2022, while procedure volumes across Abbott's cardiovascular and neuromodulation businesses were negatively impacted by surges of COVID-19 in various geographies, as well as intermittent COVID-19 lockdown restrictions in China and healthcare staffing challenges throughout the year, overall volumes improved from 2021 levels.
With respect to other products sold by the Diagnostics segment, demand for routine diagnostic testing generally fluctuated with changes in the number of COVID-19 cases in various geographic regions throughout the 2020 - 2022 period.
With respect to other products sold by the Diagnostics segment, demand for routine diagnostic testing generally fluctuated throughout the pandemic with changes in the number of COVID-19 cases in various geographic regions.
Operating Earnings Gross profit margins were 51.5 percent of net sa les in 2022, 52.2 percent of net sales in 2021, and 50.5 percent in 2020.
Operating Earnings Gross profit margins were 50.3 percent of net sa les in 2023, 51.5 percent of net sales in 2022, and 52.2 percent of net sales in 2021.
Financial Condition Cash Flow Net cash from operating activities amounted to $9.6 billion, $10.5 billion, and $7.9 billion in 2022, 2021, and 2020, respectively.
Financial Condition Cash Flow Net cash from operating activities amounted to $7.3 billion, $9.6 billion, and $10.5 billion in 2023, 2022, and 2021, respectively.
Other (Income) Expense, net Other (income) expense, net includes income of approximat ely $406 million, $270 million, and $205 million in 2022, 2021, and 2020, respectively, related to the non-service cost components of the net periodic benefit costs associated with the pension and post-retirement medical plans.
Other income, net includes income of approximat ely $498 million, $406 million, and $270 million in 2023, 2022, and 2021, respectively, related to the non-service cost components of the net periodic benefit costs associated with the pension and post-retirement medical plans.
A one-percentage point increase in the percentage of rebates to related gross sales would decrease net sales by approximately $224 million in 2022. Abbott considers a one-percentage point increase to be a reasonably likely increase in the percentage of rebates to related gross sales.
A one-percentage point increase in the percentage of rebates to related gross sales would decrease net sales by approximately $227 million in 2023. Abbott considers a one-percentage point increase to be a reasonably likely increase in the percentage of rebates to related gross sales.
Other allowances charged against gross sales were approximately $280 million, $268 million, and $207 million for cash discounts in 2022, 2021, and 2020, respectively, and $379 million, $211 million, and $232 million for returns in 2022, 2021, and 2020, respectively. Cash discounts are known within 15 to 30 days of sale, and therefore can be reliably estimated.
Other allowances charged against gross sales were approximately $263 million, $280 million, and $268 million for cash discounts in 2023, 2022, and 2021, respectively, and $169 million, $379 million, and $211 million for returns in 2023, 2022, and 2021, respectively. Cash discounts are known within 15 to 30 days of sale, and therefore can be reliably estimated.
Abbott has readily available financial resources, including unused lines of credit that support commercial paper borrowing arrangements and provide Abbott with the ability to borrow up to $5 billion on an unsecured basis. The lines of credit are part of a Five Year Credit Agreement (Revolving Credit Agreement) that Abbott entered into on November 12, 2020.
Abbott has readily available financial resources, including unused lines of credit that support commercial paper borrowing arrangements and provide Abbott with the ability to borrow up to $5 billion on an unsecured basis. The lines of credit as of December 31, 2023 were a part of a Five Year Credit Agreement that Abbott entered into on November 12, 2020.
Abbott funded $413 million in 2022, $418 million in 2021, and $400 million in 2020 to defined benefit pension plans. Abbott expects pension funding of approximately $407 million in 2023 for its pension plans. Abbott expects annual cash flow from operating activities to continue to exceed Abbott’s capital expenditures and cash dividends.
Abbott funded $349 million in 2023, $413 million in 2022, and $418 million in 2021 to defined benefit pension plans. Abbott expects pension funding of approximately $350 million in 2024 for its pension plans. Abbott expects annual cash flow from operating activities to continue to exceed Abbott’s capital expenditures and cash dividends.
In 2022, Rapid Diagnostics sales increased 15.8 percent, excluding COVID-19 testing-related sales, and 19.1 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales. These increases reflect higher sales of ID NOW tests for flu, strep, and respiratory syncytial virus (RSV) as well as growth in various other Rapid Diagnostics products.
In 2022, Rapid Diagnostics sales increased 17.0 percent, excluding COVID-19 testing-related sales, and 20.5 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales. These increases reflect higher sales of ID NOW tests for flu, strep, and respiratory syncytial virus (RSV), as well as growth in various other Rapid Diagnostics products.
Total Established Pharmaceutical Products sales increased 10.6 percent in 2022 and 10.4 percent in 2021, excluding the unfavorable impact of foreign exchange.
Total Established Pharmaceutical Products sales increased 10.9 percent in 2023 and 10.6 percent in 2022, excluding the unfavorable impact of foreign exchange.
Abbott does not regularly accumulate or make management decisions based on the total expenses incurred for a particular development phase in a given period. 34 Table of Contents Goodwill At December 31, 2022, goodwill recorded as a result of business combinations totaled $22.8 billion.
Abbott does not regularly accumulate or make management decisions based on the total expenses incurred for a particular development phase in a given period. 35 Table of Contents Goodwill At December 31, 2023, goodwill recorded as a result of business combinations totaled $23.7 billion.
Sales in emerging markets, which represent approximately 35 percent of total company sales, increased 5.6 percent in 2022 and 19.6 percent in 2021, excluding the impact of foreign exchange. (Emerging markets include all countries except the United States, Western Europe, Japan, Canada, Australia and New Zealand.) In U.S.
Sales in emerging markets, which represent approximately 38 percent of total company sales, increased 5.4 percent in 2023 and 5.6 percent in 2022, excluding the impact of foreign exchange. (Emerging markets include all countries, except the United States, Japan, Canada, Australia, New Zealand and Western European countries.) In U.S.
Abbott has also obtained regulatory approvals in the U.S., Europe and other markets for the “Alinity s” (blood screening) and “Alinity m” (molecular) instruments and several testing assays.
Abbott has obtained regulatory approval for the “Alinity h” system for hematology in the U.S., Europe, Japan and other regions. Abbott has also obtained regulatory approvals in the U.S., Europe and other markets for the “Alinity s” (blood screening) and “Alinity m” (molecular) instruments and several testing assays.
In December 2022, Abbott increased the company’s quarterly dividend by 8.5 percent to $0.51 per share from $0.47 per share, effective with the dividend paid in February 2023. In December 2021, Abbott increased the company’s quarterly dividend by 4.4 percent to $0.47 per share from $0.45 per share, effective with the dividend paid in February 2022.
In December 2023, Abbott increased the company’s quarterly dividend by 7.8 percent to $0.55 per share from $0.51 per share, effective with the dividend paid in February 2024. In December 2022, Abbott increased the company’s quarterly dividend by 8.5 percent to $0.51 per share from $0.47 per share, effective with the dividend paid in February 2023.
Abbott's material cash requirements include the following contractual obligations: Debt — Principal payments required on long-term debt outstanding at December 31, 2022 are $2.3 billion in 2023, $1.1 billion in 2024, $1.5 billion in 2025, $2.9 billion in 2026, $0.6 billion in 2027 and $8.7 billion in 2028 and thereafter.
Abbott's material cash requirements include the following contractual obligations: Debt — Principal payments required on long-term debt outstanding at December 31, 2023 are $1.1 billion in 2024, $1.5 billion in 2025, $3.0 billion in 2026, $656 million in 2027, $651 million in 2028 and $8.0 billion in 2029 and thereafter.
With respect to Abbott’s financial position, at December 31, 2022 and 2021, Abbott’s cash and cash equivalents and short-term investments total approximately $10.2 billion. Abbott’s long-term debt totals $16.8 billion and $18.1 billion at December 31, 2022 and 2021, respectively.
With respect to Abbott’s financial position, at December 31, 2023 and 2022, Abbott’s cash and cash equivalents and short-term investments total approximately $7.3 billion and $10.2 billion, respectively. Abbott’s long-term debt totals $14.7 billion and $16.8 billion at December 31, 2023 and 2022, respectively.
Excluding the impact of foreign exchange, Established Pharmaceutical sales increased 10.6 percent in 2022 and 10.4 percent in 2021. The sales increases in 2022 and 2021 reflect higher sales in several geographies including India, China, and Brazil. In 2022, operating earnings for the Established Pharmaceutical Products segment increased 18.0 percent.
Excluding the impact of foreign exchange, Established Pharmaceutical sales increased 10.9 percent in 2023 and 10.6 percent in 2022. The sales increases in 2023 and 2022 reflect higher sales in several geographies including India, Vietnam, and Brazil. In 2023, operating earnings for the Established Pharmaceutical Products segment increased 15.0 percent.
As was discussed above, sales growth in 2022 and 2021 was driven by demand for Abbott's portfolio of rapid diagnostics tests for COVID-19 and higher routine diagnostics testing in the core laboratory business, partially offset by lower demand for Abbott’s laboratory-based tests for COVID-19 in the molecular diagnostics business. In 2022, operating earnings for the Diagnostics segment increased 6.6 percent.
The 2022 sales growth was driven by demand for Abbott's portfolio of rapid diagnostics tests for COVID-19 and higher routine diagnostics testing in the core laboratory business, partially offset by lower demand for Abbott’s laboratory-based tests for COVID-19 in the molecular diagnostics business. In 2023, operating earnings for the Diagnostics segment decreased 63.4 percent.
In Abbott’s Nutritional Products segment, total pediatric nutrition sales, excluding the impact of foreign exchange, decreased 16.6 percent in 2022 as a result of the voluntary recall and manufacturing stoppage discussed above as well as challenging market dynamics in Greater China. In December 2022, Abbott initiated steps to exit its pediatric nutrition business in China.
In 2022, pediatric nutrition sales decreased 16.6 percent as a result of the voluntary recall and manufacturing stoppage discussed above, as well as challenging market dynamics in China. In December 2022, Abbott initiated steps to exit its pediatric nutrition business in China.
At December 31, 2022, pretax net actuarial losses and prior service costs and (credits) recognized in Accumulated other comprehensive income (loss) were net losses of $2.0 billion for Abbott’s defined benefit plans and net gains of $6 million for Abbott’s medical and dental plans.
At December 31, 2023, pretax net actuarial losses and prior service costs and (credits) recognized in Accumulated other comprehensive income (loss) were net losses of $1.8 billion for Abbott’s defined benefit plans and net losses of $40 million for Abbott’s medical and dental plans.
Pediatric Nutritionals and the impact of inflation and supply chain challenges on various manufacturing inputs and transportation costs across Abbott's businesses, partially offset by the favorable impact of margin improvement initiatives.
Pediatric Nutritionals and the impact of inflation and supply chain challenges on various manufacturing inputs and transportation costs across Abbott's businesses. In both 2023 and 2022, these unfavorable effects were partially offset by the favorable impact of margin improvement initiatives.
Abbott’s COVID-19 testing-related sales totaled approximately $8.4 billion in 2022, $7.7 billion in 2021 and $3.9 billion in 2020. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales decreased 0.3 percent in 2022. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased 5.1 percent.
Abbott’s COVID-19 testing-related sales totaled approximately $1.6 billion in 2023, $8.4 billion in 2022 and $7.7 billion in 2021. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales increased 9.2 percent in 2023. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased 11.7 percent.
Areas of Focus In 2023 and beyond, Abbott’s significant areas of therapeutic focus will include the following: Established Pharmaceuticals — Abbott focuses on building country-specific portfolios made up of high-quality medicines that meet the needs of people in emerging markets.
Areas of Focus In 2024 and beyond, Abbott expects to focus on the following areas: Established Pharmaceuticals — Abbott focuses on building country-specific portfolios made up of high-quality medicines that meet the needs of people in emerging markets.
Abbott declared dividends of $1.92 per share in 2022 and $1.82 per share in 2021, an increase of approximately 5.5 percent. Dividends paid totaled $3.309 billion in 2022 compared to $3.202 billion in 2021. The year-over-year change in the amount of dividends paid reflects the increase in the dividend rate.
Abbott declared dividends of $2.08 per share in 2023 and $1.92 per share in 2022, an increase of 8.3 percent . Dividends paid totaled $ 3.556 billion compared to $3.309 billion in 2022. The year-over-year change in the amount of dividends paid reflects the increase in the dividend rate.
After approval and commercial launch of some medical devices, post-market trials may be conducted either due to a conditional requirement of the regulatory market approval or with the objective of proving product superiority.
Outside the U.S. and the EU, the regulatory requirements vary across different countries and regions. After approval and commercial launch of some medical devices, post-market trials may be conducted either due to a conditional requirement of the regulatory market approval or with the objective of proving product superiority.
Molecular Diagnostics COVID-19 testing-related sales were $411 million in 2022, $891 million in 2021, and $1.0 billion in 2020. In 2022, Molecular Diagnostics sales increased 9.0 percent, excluding COVID-19 testing-related sales, and 13.8 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
In 2022, Molecular Diagnostics sales increased 9.0 percent, excluding COVID-19 testing-related sales, and 13.8 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Across Abbott’s cardiovascular and neuromodulation businesses, procedure volumes were negatively impacted i n 2021 and 2022 by surges of COVID-19 in various geographies as well as intermittent COVID-19 lockdown restrictions and healthcare staffing challenges. Despite such challenges, overall volume trends improved in several cardiovascular businesses in 2021 and 2022.
Across Abbott’s cardiovascular and neuromodulation businesses, procedure volumes were negatively impacted during the pandemic by surges of COVID-19 in various geographies as well as intermittent COVID-19 lockdown restrictions and healthcare staffing challenges. Despite such challenges, overall volume trends improved in several cardiovascular businesses and in routine diagnostic testing in 2022 and that growth continued in 2023.
The significant net actuarial gains for these plans in 2022 reflects the impact of higher discount rates on the measurement of plan liabilities, partially offset by lower asset returns during the year.
The net actuarial gains for these plans in 2023 reflect the impact of actual asset returns during the year in excess of expected returns, partially offset by the impact of lower discount rates on the measurement of plan liabilities.
Exchange (dollars in millions) Total Established Pharmaceuticals — Key Emerging Markets $ 3,728 $ 3,539 5 % (7) % 12 % Other 1,184 1,179 — (7) 7 Nutritionals — International Pediatric Nutritionals 1,919 2,106 (9) (5) (4) U.S. Pediatric Nutritionals 1,562 2,192 (29) — (29) International Adult Nutritionals 2,621 2,632 — (8) 8 U.S.
Exchange (dollars in millions) Total Established Pharmaceuticals — Key Emerging Markets $ 3,766 $ 3,565 5.6 % (6.5) % 12.1 % Other 1,146 1,153 (0.6) (6.7) 6.1 Nutritionals — International Pediatric Nutritionals 1,919 2,106 (8.9) (5.0) (3.9) U.S. Pediatric Nutritionals 1,562 2,192 (28.7) — (28.7) International Adult Nutritionals 2,621 2,632 (0.4) (8.0) 7.6 U.S.
Capital Expenditures Capital expenditures of $1.8 billion in 2022, $1.9 billion in 2021, and $2.2 billion in 2020 were principally for upgrading and expanding manufacturing and research and development facilities and equipment in various segments, investments in information technology, and laboratory instruments placed with customers. 2020 capital expenditures also included the building of capacity for the manufacture of COVID-19 diagnostics tests.
Capital Expenditures Capital expenditures of $2.2 billion in 2023, $1.8 billion in 2022, and $1.9 billion in 2021 were principally for upgrading and expanding manufacturing and research and development facilities and equipment in various segments, investments in information technology, and laboratory instruments placed with customers.
In 2022 and 2021, Abbott experienced availability issues with some services and materials used in its products. To date, Abbott has been able to manage the various supply chain challenges without significant supply disruption or shortage for services, raw materials and supplies.
While Abbott experienced availability issues with some services and materials used in its products over the last three years, Abbott was able to manage the various supply chain challenges without significant supply disruption or shortage for services, raw materials and supplies.
Rebates and chargebacks charged against gross sales in 2022, 2021, and 2020 amounted to approximately $3.9 billion, $3.9 billion, and $3.3 billion, respectively, or 17.6 percent, 17.5 percent, and 20.1 percent of gross sales, respectively, based on gross sales of approximately $22.4 billion, $22.3 billion, and $16.6 billion, respectively, subject to rebate.
Rebates and chargebacks charged against gross sales in 2023, 2022, and 2021 amounted to approximately 24 Table of Contents $3.9 billion per year, or 17.4 percent, 17.6 percent, and 17.5 percent of gross sales, respectively, based on gross sales of approximately $22.7 billion, $22.4 billion, and $22.3 billion, respectively, subject to rebate.
Any borrowings under the Revolving Credit Agreement will mature and be payable on November 12, 2025, and will bear interest, at Abbott’s option, based on either a base rate or Eurodollar rate, plus an applicable margin based on Abbott’s credit ratings.
Any borrowings under the Revolving Credit Agreement will mature and be payable on January 29, 2029 and will bear interest, at Abbott’s option, based on either a base rate or Secured Overnight Financing Rate (SOFR) rate, plus an applicable margin based on Abbott’s credit ratings.
In December 2021, the board of directors authorized the repurchase of up to $5 billion of Abbott’s common shares from time to time. This authorization was in addition to the $1.081 billion portion of the share repurchase program authorized in 2019 that was unused as of December 31, 2021.
This authorization was in addition to the $1.081 billion portion of the share repurchase program authorized in 2019 that was unused as of December 31, 2021.
(The Diagnostics segment includes the Rapid Diagnostics, Core Laboratory Diagnostics, Molecular Diagnostics and Point of Care Diagnostics divisions.) In 2020 and 2021, Abbott mobilized its teams across multiple fronts to develop and launch various new diagnostic tests to detect COVID-19.
(The Diagnostics segment includes the Rapid Diagnostics, Core Laboratory Diagnostics, Molecular Diagnostics and Point of Care Diagnostics businesses.) After mobilizing its teams across multiple fronts in 2020 and 2021, Abbott developed and launched multiple types of new diagnostic tests to detect COVID-19.
Operating margins increased from 18.5 percent of sales in 2020 to 21.4 percent in 2022 primarily due to the impact of gross margin improvement initiatives and higher selling prices partially offset by inflation on various product inputs.
Operating margins increased from 18.8 percent in 2021 to 23.8 percent in 2023 primarily due to the impact of gross margin improvement initiatives and higher sales, partially offset by inflation on various product inputs.
In its diagnostics business, Abbott's focus will include driving sales growth from its Alinity suite of diagnostics instruments and its portfolio of rapid diagnostic testing systems as well as continuing to meet COVID-19 test demand. In the Medical Devices segment, Abbott will focus on launching various new products and expanding its market position across the various businesses.
In its diagnostics business, Abbott's focus will include driving sales growth from its Alinity suite of diagnostics instruments and its portfolio of rapid diagnostic testing systems. In the medical devices business, Abbott will focus on growing recently launched new products and expanding its market position across the various businesses.
In the second quarter of 2017, the EU adopted the new Medical Devices Regulation (MDR) which replaced the existing directives in the EU for medical devices and imposes additional premarket and post-market regulatory requirements on manufacturers of such products. The MDR applies to manufacturers as of May 26, 2021 with a transition period until May 26, 2024.
In the second quarter of 2017, the EU adopted the new Medical Devices Regulation (MDR) which replaced the existing directives in the EU for medical devices and imposes additional premarket and post-market regulatory requirements on manufacturers of such products.
The increase primarily reflects higher spending on various projects to advance products in development as well as the impairment of certain in-process R&D intangible assets partially offset b y the favorable impact of foreign exchange. Th e increase in 2021 R&D spending was primarily driven by higher spending on various projects to advance products in development.
The increase in 2022 versus 2021 primarily reflected higher spending on various projects to advance products in development, as well as a charge related to the impairment of certain in-process R&D intangible assets, partially offset by the favorable impact of foreign exchange.
In 2022, U.S. Adult Nutritional sales decreased 0.5 percent as continued growth of the Ensure brand was offset by lower sales of other products and the impact of temporarily utilizing liquid manufacturing capacity to manufacture infant formula. In 2021, U.S. Adult Nutritional sales increased 5.6 percent, primarily due to growth of Ensure and Glucerna.
Adult Nutritional sales increased 5.8 percent and decreased 0.5 percent, respectively. The growth in 2023 was led by higher Ensure ® and Glucerna ® product sales. In 2022, the growth of the Ensure brand was offset by lower sales of other products and the impact of temporarily utilizing liquid manufacturing capacity to manufacture infant formula.
At December 31, 2022, goodwill amounted to $22.8 billion and net intangibles amounted to $10.5 billion . Amortization expense in continuing operations for intangible assets amounted to $2.0 billion in 2022 and 2021 and $2.1 billion in 2020 . There was no reduction of goodwill relating to impairments in 2022 , 2021 , and 2020 .
At December 31, 2023, goodwill amounted to $23.7 billion and net intangibles amounted to $8.8 billion . Amortization expense for intangible assets amounted to $2.0 billion per year in 2023, 2022 and 2021 . There was no reduction of goodwill relating to impairments in 2023 , 2022 , and 2021 .
In addition, Abbott recognized inventory-related charges of approximately $23 million and fixed assets impairment charges of approximately $4 million related to these restructuring plans. 30 Table of Contents In 2021, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in Abbott's diagnostic, established pharmaceutical, nutritional, and medical device businesses.
In addition, Abbott recognized fixed asset impairment and inventory related charges of approximately $31 million related to these restructuring plans. In 2022, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its medical devices, nutritional, diagnostic, and established pharmaceutical businesses.
A more complete discussion of these factors is contained in Item 1, Business, and Item 1A, Risk Factors. 36 Table of Contents Recently Issued Accounting Standards In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which among other things, eliminates certain exceptions in the current rules regarding the approach for intraperiod tax allocations and the methodology for calculating income taxes in an interim period, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which among other things, eliminates certain exceptions in the current rules regarding the approach for intraperiod tax allocations and the methodology for calculating income taxes in an interim period, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.
Core Laboratory Diagnostics COVID-19 testing-related sales on Abbott’s ARCHITECT and Alinity i platforms were $62 million in 2022, $204 million in 2021, and $262 million in 2020. In 2022, Core Laboratory Diagnostics sales decreased 2.0 percent, excluding COVID-19 testing-related sales, and increased 4.8 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Core Laboratory Diagnostics COVID-19 testing-related sales on Abbott’s ARCHITECT and Alinity i platforms were $20 million in 2023, $62 million in 2022, and $204 million in 2021. Excluding COVID-19 testing-related sales, Core Laboratory Diagnostics sales increased 6.5 percent in 2023 and decreased 2.0 percent in 2022.
Abbott reviews definite-lived intangible assets for impairment each quarter using an undiscounted net cash flows approach. If the undiscounted cash flows of an intangible asset are less than the carrying value of an intangible asset, the intangible asset is written down to its fair value, which is usually the discounted cash flow amount.
If the undiscounted cash flows of an intangible asset are less than the carrying value of an intangible asset, the intangible asset is written down to its fair value, which is usually the discounted cash flow amount.
The decrease was driven by the impact of the voluntary infant product recall and manufacturing stoppage as well as higher manufacturing and distribution costs, including commodity prices, partially offset by the impact of gross margin improvement initiatives and select product price increases. The Established Pharmaceutical Products segment focuses on the sale of its products in emerging markets.
The decrease in 2022 was driven by the impact of the voluntary infant product recall and manufacturing stoppage as well as higher manufacturing and distribution costs, including commodity prices, partially offset by the impact of gross margin improvement initiatives.
While Abbott’s branded generic pharmaceuticals business was also negatively affected by the pandemic in 2020 as COVID-19 spread across emerging market countries, volumes recovered and grew in 2021 and 2022. Abbott’s nutritional and diabetes care businesses were the least affected by the pandemic. 21 Table of Contents Abbott is continually monitoring the effects of the pandemic on its operations.
While Abbott’s branded generic pharmaceuticals business was also negatively affected by the pandemic in 2020 as COVID-19 spread across emerging market countries, volumes recovered and grew over the 2021 to 2023 period. Abbott’s nutritional and diabetes care businesses were the least affected by the pandemic.
While Abbott expects inflationary pressures on various raw materials, packaging materials and transportation costs to continue in 2023, the impact of such cost increases is expected to be at least partially mitigated by price increases in certain businesses and the impact of continued gross margin improvement initiatives.
While Abbott experienced inflationary pressures on various raw materials, packaging materials and transportation costs over the last three years, the impact of such cost increases was partially mitigated by price increases in certain businesses and the impact of continued gross margin improvement initiatives.
FreeStyle Libre sales totaled $4.3 billion in 2022, which reflected a 22.4 percent increase, excluding the effect of foreign exchange, over 2021. FreeStyle Libre sales totaled $3.7 billion in 2021, which reflected a 36.8 percent increase, excluding the effect of foreign exchange, over 2020 when sales totaled $2.6 billion.
FreeStyle Libre sales totaled $5.3 billion in 2023, which reflected a 25.5 percent increase, excluding the effect of foreign exchange, over 2022 when FreeStyle Libre sales totaled $4.3 billion.
In 2021, Core Laboratory Diagnostics sales increased 12.4 percent, excluding the effect of foreign exchange, as a higher volume of routine diagnostic testing performed in hospitals and other laboratories was partially offset by lower sales of tests for the detection of COVID-19 IgG and IgM antibodies.
In Core Laboratory Diagnostics, sales increased 8.4 percent in 2023 and 1.9 percent in 2022, excluding the effect of foreign exchange. The increases in 2023 and 2022 were due to higher year-over-year volume of routine diagnostic testing performed in hospitals and other laboratories, partially offset by lower test sales for the detection of COVID-19 IgG and IgM antibodies.
Excluding the impact of foreign exchange, total adult nutrition sales increased 4.8 percent in 2022 and 12.8 percent in 2021, led by the continued growth of Ensure ® , Abbott’s market-leading complete and balanced nutrition brand, and Glucerna ® , Abbott’s market-leading diabetes-specific nutrition brand, across several countries. In 2022, operating earnings for the Nutritional Products segment decreased 60.0 percent.
Excluding the impact of foreign exchange, total adult nutrition sales increased 8.8 percent in 2023 and 4.8 percent in 2022, led by the continued growth of Abbott's Ensure ® and Glucerna ® products across several countries. In 2023, operating earnings for the Nutritional Products segment increased 88.9 percent compared to 2022.
Under the program authorized in 2014, Abbott repurchased 1.6 million shares at a cost of $173 million in 2020. 35 Table of Contents In 2021, Abbott repurchased 16.6 million of its common shares for $2.016 billion which fully utilized the authorization remaining under the 2014 share repurchase program and a portion of the 2019 authorization.
In 2021, Abbott repurchased 16.6 million of its common shares for $2.016 billion, which fully utilized the authorization remaining under the 2014 share repurchase program and a portion of the 2019 authorization. In December 2021, the board of directors authorized the repurchase of up to $5 billion of Abbott’s common shares from time to time.
In 2022, Abbott repurchased 32.3 million of its common shares for $3.65 billion which fully utilized the authorization remaining under the 2019 share repurchase program and a portion of the 2021 authorization. As of December 31, 2022, $2.43 billion remains available for repurchase under the 2021 repurchase program.
In 2022, Abbott repurchased 32.3 million of its common shares for $3.65 billion which fully utilized the authorization remaining under the 2019 share repurchase program and a portion of the 2021 36 Table of Contents authorization. In 2023, Abbott repurchased approximately 9.8 million of its common shares for $1.025 billion.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeContracts held at December 31, 2021 matured in 2022 or will mature in 2023 depending upon the contract. Abbott enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated intercompany loans and trade payables and third-party trade payables and receivables.
Biggest changeAbbott enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated intercompany loans and trade payables and third-party trade payables and receivables. The contracts are marked-to-market, and resulting gains or losses are reflected in income and are generally offset by losses or gains on the foreign currency exposure being managed.
No individual investment is recorded at a value in excess of $15 million. Abbott measures these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
No individual investment is recorded at a value in excess of $20 million. Abbott measures these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
A hypothetical 20 percent decrease in the share prices of these investments would decrease their fair value at December 31, 2022 by approximately $2 million. Changes in the fair value of these securities are recorded in earnings.
A hypothetical 20 percent decrease in the share prices of these investments would decrease their fair value at December 31, 2023 by approximately $2 million. Changes in the fair value of these securities are recorded in earnings.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Financial Instruments and Risk Management Market Price Sensitive Investments The fair value of equity securities held by Abbott with a readily determinable fair value was approximately $9 million and $11 million as of December 31, 2022 and 2021, respectively. These equity securities are subject to potential changes in fair value.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Financial Instruments and Risk Management Market Price Sensitive Investments The fair value of equity securities held by Abbott with a readily determinable fair value was approximately $12 million and $9 million as of December 31, 2023 and 2022, respectively. These equity securities are subject to potential changes in fair value.
Changes in the fair value of these investments, as well as an offsetting change in the benefit obligation, are recorded in earnings. Non-Publicly Traded Equity Securities Abbott holds equity securities that are not traded on public stock exchanges. The carrying value of these investments was $83 million and $90 million as of December 31, 2022 and 2021, respectively.
Changes in the fair value of these investments, as well as an offsetting change in the benefit obligation, are recorded in earnings. Non-Publicly Traded Equity Securities Abbott holds equity securities that are not traded on public stock exchanges. The carrying value of these investments was $88 million and $83 million as of December 31, 2023 and 2022, respectively.
At December 31, 2022 and 2021, the fair value of current and long-term investment securities amounted to approximately $1.1 billion and $1.3 billion, respectively. A hypothetical 100-basis point change in the interest rates would not have a material effect on cash flows, income or fair values.
At December 31, 2023 and 2022, the fair value of current and long-term investment securities amounted to approximately $1.2 billion and $1.1 billion, respectively. A hypothetical 100-basis point change in the interest rates would not have a material effect on cash flows, income or fair values.
The fair value of investments in mutual funds that are held in a rabbi trust for the purpose of paying benefits under a deferred compensation plan was approximately $298 million and $391 million as of December 31, 2022 and 2021, respectively.
The fair value of investments in mutual funds that are held in a rabbi trust for the purpose of paying benefits under a deferred compensation plan was approximately $314 million and $298 million as of December 31, 2023 and 2022, respectively.
Abbott has designated a yen-denominated, 5-year term loan of approximately $446 million and $521 million as of December 31, 2022 and December 31, 2021, respectively, as a hedge of the net investment in certain foreign subsidiaries.
Abbott has designated a yen-denominated, 5-year term loan of approximately $419 million and $446 million as of December 31, 2023 and December 31, 2022, respectively, as a hedge of the net investment in certain foreign subsidiaries.
The fair value of long-term debt at December 31, 2022 and 2021 amounted to $16.3 billion and $21.2 billion, respectively (average interest rates of 3.5% and 3.4% as of December 31, 2022 and 2021, respectively) with maturities through 2046.
The fair value of long-term debt at December 31, 2023 and 2022 amounted to $14.8 billion and $16.3 billion, respectively (average interest rates of 3.6% and 3.5% as of December 31, 2023 and 2022, respectively) with maturities through 2046.
Gains or losses will be included in Cost of products sold at the time the products are sold, generally within the next twelve to eighteen months. At December 31, 2022 and 2021, Abbott held $7.7 billion and $8.6 billion, respectively, of such contracts. Contracts held at December 31, 2022 will mature in 2023 or 2024 depending on the contract.
Gains or losses will be included in Cost of products sold at the time the products are sold, generally within the next twelve to eighteen months. At December 31, 2023 and 2022, Abbott held $7.3 billion and $7.7 billion of notional values, respectively, of such contracts.
The change in the value of the debt, which is due to changes in foreign exchange rates, is recorded in Accumulated other comprehensive income (loss), net of tax. 38 Table of Contents The following table reflects the total foreign currency forward exchange contracts outstanding at December 31, 2022 and 2021: 2022 2021 (dollars in millions) Contract Amount Weighted Average Exchange Rate Fair and Carrying Value Receivable/ (Payable) Contract Amount Weighted Average Exchange Rate Fair and Carrying Value Receivable/ (Payable) Primarily U.S. dollars to be exchanged for the following currencies: Euro $ 7,656 1.0664 $ 92 $ 8,698 1.1360 $ 90 Chinese Yuan 2,264 6.8825 12 2,148 6.5744 (35) Japanese Yen 1,797 133.0344 (7) 1,497 111.7260 31 All other currencies 8,029 n/a 89 8,426 n/a 109 Total $ 19,746 $ 186 $ 20,769 $ 195 39 Table of Contents
The change in the value of the debt, which is due to changes in foreign exchange rates, is recorded in Accumulated other comprehensive income (loss), net of tax. 39 Table of Contents The following table reflects the total foreign currency forward exchange contracts outstanding at December 31, 2023 and 2022: 2023 2022 (dollars in millions) Contract Amount Weighted Average Exchange Rate Fair and Carrying Value Receivable/ (Payable) Contract Amount Weighted Average Exchange Rate Fair and Carrying Value Receivable/ (Payable) Primarily U.S. dollars to be exchanged for the following currencies: Euro $ 9,221 1.0865 $ (35) $ 7,656 1.0664 $ 92 Chinese Yuan 2,115 7.0785 3 2,264 6.8825 12 Japanese Yen 1,635 138.2288 24 1,797 133.0344 (7) All other currencies 8,189 n/a (54) 8,029 n/a 89 Total $ 21,160 $ (62) $ 19,746 $ 186 40 Table of Contents
Interest Rate Sensitive Financial Instruments At December 31, 2022 and 2021, Abbott had interest rate hedge contracts totaling $2.9 billion to manage its exposure to changes in the fair value of debt. The effect of these hedges is to change the fixed interest rate to a variable rate for the portion of the debt that is hedged.
Interest Rate Sensitive Financial Instruments At December 31, 2023 and 2022, Abbott had interest rate hedge contracts with notional values totaling $2.2 billion and $2.9 billion, respectively, to manage its exposure to changes in the fair value of debt.
Abbott does not use derivative financial instruments, such as interest rate swaps, to manage its exposure to changes in interest rates for its investment securities.
The effect of these hedges is to change the fixed interest rate to a variable rate for the portion of the debt that is hedged. Abbott does not use derivative financial instruments, such as interest rate swaps, to manage its exposure to changes in interest rates for its investment securities.
The contracts are marked-to-market, and resulting gains or losses are reflected in income and are generally offset by losses or gains on the foreign currency exposure being managed. At December 31, 2022 and 2021, Abbott held $12.0 billion and $12.2 billion, respectively, of such contracts, which mature in the next 13 months.
At December 31, 2023 and 2022, Abbott held $13.8 billion and $12.0 billion of notional values, respectively, of such contracts, which mature within 13 months.
Added
Contracts held at December 31, 2023 will mature in 2024 or 2025 depending on the contract. Contracts held at December 31, 2022 matured in 2023 or will mature in 2024 depending upon the contract.

Other ABT 10-K year-over-year comparisons