Abbott Laboratories 2014 Annual Report Download - page 57

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ABBOTT 2014 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Remaining costs, if any, are not allocated to segments. In addition,
intangible asset amortization is not allocated to operating segments,
and intangible assets and goodwill are not included in the measure
of each segment’s assets. The following segment information has
been prepared in accordance with the internal accounting policies
of Abbott, as described above, and are not presented in accordance
with generally accepted accounting principles applied to the
consolidated financial statements.
(inmillions)
Net Sales to External
Customers (a) Operating Earnings (a)
2014 2013 2012 2014 2013 2012
Established
Pharmaceuticals $÷3,118 $÷2,862 $÷2,769 $÷«624 $÷«551 $÷«531
Nutritionals 6,953 6,740 6,461 1,459 1,263 1,020
Diagnostics 4,721 4,545 4,292 1,079 1,008 825
Vascular 2,986 3,012 3,071 1,091 962 1,020
Total Reportable
Segments 17,778 17,159 16,593 $4,253 $3,784 $3,396
Other 2,469 2,498 2,457
Total $20,247 $19,657 $19,050
(a) Net sales and operating earnings were unfavorably aected by the relatively stronger
U.S. dollar in 2014, 2013 and 2012.
(inmillions) 2014 2013 2012
Total Reportable Segment
Operating Earnings $4,253 $3,784 $«3,396
Corporate functions and benefit
plans costs (342) (514) (593)
Non-reportable segments 439 430 449
Net interest expense (73) (78) (261)
Net loss on extinguishment of debt (18) — (1,351)
Share-based compensation (239) (254) (278)
Amortization of intangible assets (555) (588) (595)
Other, net (b) (947) (739) (987)
Earnings (Loss) from Continuing
Operations before Taxes $2,518 $2,041 $÷«(220)
(b) Other, net includes: charges for cost reduction initiatives of approximately $290million
in 2014, $350million in 2013 and charges of $430million in 2012.
NOTE 15—SEGMENT AND GEOGRAPHIC AREA INFORMATION
Abbott’s principal business is the discovery, development, manu-
facture and sale of a broad line of health care products. Abbott’s
products are generally sold directly to retailers, wholesalers,
hospitals, health care facilities, laboratories, physicians’ oces
and government agencies throughout the world. As a result of
the separation of AbbVie, Abbott no longer has a Proprietary
Pharmaceutical Products segment and this business has been
removed from the 2012 historical information presented below. In
July 2014, Abbott announced that it will sell its developed markets
branded generics pharmaceuticals business to Mylan. This busi-
ness was previously included in the Established Pharmaceutical
Products segment. The segment information below, including prior
period amounts, has been adjusted to reflect the classification of
the developed markets branded generics pharmaceuticals business
as part of discontinued operations in the Consolidated Statement
of Earnings. Abbott’s reportable segments are as follows:
Established Pharmaceutical Products—International sales of a
broad line of branded generic pharmaceutical products.
Nutritional Products—Worldwide sales of a broad line of adult
and pediatric nutritional products.
Diagnostic Products—Worldwide sales of diagnostic systems and
tests for blood banks, hospitals, commercial laboratories and
alternate-care testing sites. For segment reporting purposes, the
Core Laboratories Diagnostics, Molecular Diagnostics, Point of
Care and Ibis diagnostic divisions are aggregated and reported
as the Diagnostic Products segment.
Vascular Products—Worldwide sales of coronary, endovascular,
structural heart, vessel closure and other medical device products.
Non-reportable segments include the Diabetes Care and Medical
Optics segments.
Abbott’s underlying accounting records are maintained on a legal
entity basis for government and public reporting requirements.
Segment disclosures are on a performance basis consistent with
internal management reporting. The cost of some corporate func-
tions and the cost of certain employee benefits are charged to
segments at predetermined rates that approximate cost.
(inmillions)
Depreciation (c) Additions to Long-term Assets Total Assets
2014 2013 2012 2014 2013 2012 2014 2013 2012
Established Pharmaceuticals $÷72 $÷63 $÷«135 $÷«136 $÷«128 $÷«237 $÷2,244 $1,445 $1,382
Nutritionals 173 190 175 174 340 428 3,435 3,518 3,211
Diagnostics 314 368 295 349 394 349 2,964 3,312 3,286
Vascular 84 122 76 28 62 69 1,529 1,711 1,834
Total Reportable Segments 643 743 681 687 924 1,083 $10,172 $9,986 $9,713
Other 275 185 682 4,603 981 902
Total $918 $928 $1,363 $5,290 $1,905 $1,985
(c) Amounts in Other include depreciation related to discontinued operations.