Abbott Laboratories 2014 Annual Report Download - page 75

FINANCIAL REVIEW
73
ABBOTT 2014 ANNUAL REPORT
CONTINGENT OBLIGATIONS
Abbott has periodically entered into agreements with other com-
panies in the ordinary course of business, such as assignment of
product rights, which has resulted in Abbott becoming second-
arily liable for obligations that Abbott was previously primarily
liable. Since Abbott no longer maintains a business relationship
with the other parties, Abbott is unable to develop an estimate of
the maximum potential amount of future payments, if any, under
these obligations. Based upon past experience, the likelihood of
payments under these agreements is remote. In addition, Abbott
periodically acquires a business or product rights in which Abbott
agrees to pay contingent consideration based on attaining certain
thresholds or based on the occurrence of certain events.
LEGISLATIVE ISSUES
Abbott’s primary markets are highly competitive and subject to sub-
stantial government regulations throughout the world. Abbott expects
debate to continue over the availability, method of delivery, and pay-
ment for health care products and services. It is not possible to predict
the extent to which Abbott or the health care industry in general
might be adversely aected by these factors in the future. A more
complete discussion of these factors is contained in Item 1, Business,
and Item 1A, Risk Factors, to the Annual Report on Form 10-K.
CONTRACTUAL OBLIGATIONS
The table below summarizes Abbott’s estimated contractual obligations as of December31, 2014.
(inmillions)
Payments Due By Period
Total 2015 2016-2017 2018-2019
2020 and
Thereafter
Long-term debt, including current maturities $÷3,463 $÷÷«14 $÷÷«59 $1,003 $2,387
Interest on debt obligations 2,805 180 353 313 1,959
Operating lease obligations 639 161 219 114 145
Capitalized auto lease obligations 41 14 27 — —
Purchase commitments (a) 2,709 2,089 204 218 198
Other long-term liabilities 1,300 — 792 368 140
Total (b) $10,957 $2,458 $1,654 $2,016 $4,829
(a) Purchase commitments are for purchases made in the normal course of business to meet operational and capital expenditure requirements.
(b) Unrecognized tax benefits totaling approximately $1.3billion are excluded from the table above as Abbott is unable to reasonably estimate the period of cash settlement with the
respective taxing authorities on such items. See Note 14—Taxes on Income for further details. The company has employee benefit obligations consisting of pensions and other postemployment
benefits, including medical and life, which have been excluded from the table. A discussion of the company’s pension and postretirement plans, including funding matters is included in
Note13—Post-employment Benefits.
RECENTLY ISSUED ACCOUNTING STANDARDS
In May 2014, the Financial Accounting Standards Board issued
Accounting Standards Update No. 2014-09, Revenue from Contracts
with Customers, which provides a single comprehensive model for
accounting for revenue from contracts with customers and will
supersede most existing revenue recognition guidance. Early adop-
tion is not permitted. The standard becomes eective for Abbott in
the first quarter of 2017. Abbott is currently evaluating the eect, if
any, that the standard will have on its consolidated financial state-
ments and related disclosures.
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
A CAUTION CONCERNING FORWARDLOOKING STATEMENTS
Under the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, Abbott cautions investors that any forward-
looking statements or projections made by Abbott, including those
made in this document, are subject to risks and uncertainties that
may cause actual results to dier materially from those projected.
Economic, competitive, governmental, technological and other
factors that may aect Abbott’s operations are discussed in Item1A,
Risk Factors, to the Annual Report on Form10-K.
Assuming $100 invested on 12/31/09 with dividends reinvested.
Abbott Laboratories
S&P 500 Index
S&P 500 Health Care
2009 20112010 2012 2013 2014
$250
$50
$100
$150
$200
PERFORMANCE GRAPH
This graph compares the change
in Abbott’s cumulative total shareholder
return on its common shares with the
Standard & Poor’s 500 Index and the
Standard & Poor’s 500 Health Care Index.