Abbott Laboratories (ABT) 10-K risk factor changes: FY2019 vs FY2018

[removed: Abbott] [added: *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 [removed: profitability.][added: profitability.*]

[removed: Abbott] [added: *Abbott] is subject to cost containment efforts that could cause a reduction in future revenues and operating [removed: income.][added: income.*]

[removed: Abbott] [added: *Abbott] is subject to numerous governmental regulations and it can be costly to comply with these regulations and to develop compliant products and [removed: processes.][added: processes.*]

[removed: Abbott's] [added: Abbott’s] products are subject to rigorous regulation by the [removed: U.S. Food and Drug Administration (FDA)] [added: FDA] and numerous international, supranational, federal, and state authorities.

[removed: Laws] [added: *Laws] and regulations affecting government benefit programs could impose new obligations on Abbott, require Abbott to change its business practices, and restrict its operations in the [removed: future.][added: future.*]

[removed: Changes] [added: *Changes] in the health care regulatory environment may adversely affect [removed: Abbott's business.][added: Abbott’s business.*]

Further, in the U.S., a number of the provisions of the U.S. Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 address access to health care products and [removed: services and establish certain fees for the medical device industry.][added: services.]

As of December 31, [removed: 2018,] [added: 2019,] Abbott's consolidated indebtedness was approximately [removed: $19.6] [added: $18] billion.

This consolidated indebtedness [removed: increased Abbott's consolidated interest expense and] could have the effect, among other things, of reducing Abbott's flexibility to respond to changing business and economic conditions, and reducing funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes.

Additionally, further borrowing could cause a deterioration of Abbott's credit [removed: rating.][added: ratings.]

[removed: Abbott] [added: *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 [removed: Abbott's] [added: Abbott’s] results of [removed: operations.][added: operations.*]

In addition, third party hacking attempts may cause [removed: Abbott's] [added: Abbott’s] information technology systems and related products, protected data, or proprietary information to be [removed: compromised.][added: compromised or stolen.]

[removed: The] [added: *The] expiration or loss of patent protection and licenses may affect [removed: Abbott's] [added: Abbott’s] future revenues and operating [removed: income.][added: income.*]

[removed: Competitors'] [added: *Competitors’] intellectual property may prevent Abbott from selling its products or have a material adverse effect on [removed: Abbott's] [added: Abbott’s] future profitability and financial [removed: condition.][added: condition.*]

Competitors may claim that an Abbott product infringes [removed: upon] their intellectual property.

[removed: Abbott's] [added: *Abbott’s] research and development efforts may not succeed in developing commercially successful products and technologies, which may cause [removed: Abbott's] [added: Abbott’s] revenue and profitability to [removed: decline.][added: decline.*]

Even if Abbott successfully develops new products or enhancements or new generations of [removed: Abbott's] [added: Abbott’s] existing products, they may be quickly rendered obsolete by changing customer preferences, changing industry [added: or regulatory] standards, or [removed: competitors'] [added: competitors’] innovations.

[removed: Abbott cannot state with certainty when or whether any of its products under] development will be launched, whether it will be able to develop, license, or otherwise acquire compounds or products, or whether any products will be commercially successful.

[removed: New] [added: *New] products and technological advances by [removed: Abbott's] [added: Abbott’s] competitors may negatively affect [removed: Abbott's] [added: Abbott’s] results of [removed: operations.][added: operations.*]

[removed: The] [added: The] manufacture of many of [removed: Abbott's] [added: Abbott’s] products is a highly exacting and complex process, and if Abbott or one of its suppliers encounters problems manufacturing products, [removed: Abbott's] [added: Abbott’s] business could [removed: suffer.][added: suffer.]

[removed: This] [added: Any of these events] could, among other things, lead to increased costs, lost revenue, damage to customer relations, time and expense spent investigating the cause and, depending on the cause, [added: similar losses with respect to other lots, batches or products.]

[removed: Significant] [added: *Significant] safety concerns could arise for [removed: Abbott's] [added: Abbott’s] products, which could have a material adverse effect on [removed: Abbott's] [added: Abbott’s] revenues and financial [removed: condition.][added: condition.*]

[removed: Fluctuation] [added: *Fluctuation] in foreign currency exchange rates may adversely affect our financial statements and [removed: Abbott's] [added: Abbott’s] ability to realize projected sales and [removed: earnings.][added: earnings.*]

Sales outside of the United States in [removed: 2018] [added: 2019] made up approximately [removed: 65] [added: 64] percent of [removed: Abbott's] [added: Abbott’s] net sales.

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 [removed: Abbott's 2018] [added: Abbott’s 2019] Form 10-K.

Information on [removed: Abbott's] [added: Abbott’s] hedging arrangements is contained in Note [removed: 12] [added: 13] to the consolidated financial statements in this report.

[removed: Deterioration] [added: *Deterioration] in the economic condition and credit quality of certain countries may negatively affect [removed: Abbott's] [added: Abbott’s] results of [removed: operations.][added: operations.*]

[added: Deterioration in the quality of] sovereign debt, including credit downgrades, could increase [removed: Abbott's] [added: Abbott’s] collection risk where a significant amount of [removed: Abbott's] [added: Abbott’s] receivables in these countries are with governmental health care systems or where [removed: Abbott's] [added: Abbott’s] customers depend on payment by government health care systems.

[removed: The] [added: *The] international nature of [removed: Abbott's] [added: Abbott’s] business subjects it to additional business risks that may cause its revenue and profitability to [removed: decline.][added: decline.*]

[added: | | ● |] differing local product preferences and product requirements; [added: |]

[added: | | ● |] trade protection measures, including tariffs, import or export licensing requirements, and changes to international trade agreements; [added: |]

[added: | | ● |] difficulty in establishing, staffing, and managing operations; [added: |]

[added: | | ● |] differing labor regulations; [added: |]

[added: | | ● |] potentially negative consequences from changes in or interpretations of tax laws; [added: |]

[added: | | ● |] political and economic instability, including sovereign debt issues; [added: |]

[added: | | ● |] restrictions on local currency conversion and/or cash extraction; [added: |]

[added: | | ● |] price controls, limitations on participation in local enterprises, expropriation, nationalization, and other governmental action; [added: |]

[added: | | ● |] inflation, recession, and fluctuations in interest rates; [added: |]

[added: | | ● |] diminished protection of intellectual property; and [added: |]

[added: | | ● |] 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. Bribery Act. [added: |]

Abbott is subject to certain regional and local data protection laws that prohibit or restrict the transfer of protected data across country borders.

Abbott has significant indebtedness, which could adversely affect its business, including decreasing its business flexibility.

Abbott cannot state with certainty when or whether any of its products under

Sales outside of the United States in 2019 made up approximately 64 percent of Abbott’s net sales.

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Abbott has incurred and assumed significant indebtedness, which has increased consolidated interest expense and could decrease business flexibility.

Abbott incurred and assumed significant indebtedness in connection with the 2017 acquisitions of St. Jude Medical and Alere.

similar losses with respect to other lots, batches or products.

Deterioration in the quality of

[removed: Financial] [added: Financial] Review

[removed: Abbott's] [added: Abbott’s] primary products are [removed: cardiovascular and neuromodulation products,] [added: medical devices,] diagnostic testing products, nutritional products and branded generic pharmaceuticals.

Sales in international markets comprise approximately [removed: 65] [added: 64] percent of consolidated net sales.

[added: | | ● | In January 2017, Abbott acquired St. Jude Medical, Inc. (St. Jude Medical), a global medical device manufacturer, for approximately $23.6 billion. As part of the acquisition, Abbott also assumed, repaid or refinanced approximately $5.9 billion of St. Jude Medical’s debt.] The acquisition provided expanded opportunities for future growth and is an important part of the company's effort to develop a strong, diverse portfolio. [added: |]

[added: | | ● | In October 2017, Abbott acquired Alere Inc. (Alere), a diagnostic device and service provider, for approximately $4.5 billion.] As part of the acquisition, Abbott also tendered for [removed: Alere's] [added: Alere’s] preferred shares for a total value of approximately $0.7 billion and assumed and subsequently repaid approximately $3.0 billion of [removed: Alere's] [added: Alere’s] debt. [added: The acquisition established Abbott as a leader in point of care testing, expanded Abbott’s global diagnostics presence and provided access to new products, channels and geographies. |]

[added: | | ● |] In February 2017, Abbott completed the sale of Abbott Medical Optics (AMO), its vision care business, to Johnson & Johnson for $4.325 billion in cash and recognized an after-tax gain of $728 million. [added: |]

The [removed: sales] increase [added: in total sales] over the last three years reflects both [added: volume growth across Abbott’s businesses and] the 2017 acquisitions of St. Jude Medical and [removed: Alere and volume growth across Abbott's businesses, most notably in the Established Pharmaceuticals, Diabetes Care and Diagnostics businesses.][added: Alere.]

Sales in emerging markets, which represent approximately 40 percent of total company sales, increased [removed: 12.3] [added: 8.2] percent in [removed: 2018] [added: 2019] and [removed: 13.9] [added: 12.3] percent in [removed: 2017,] [added: 2018,] excluding the impact of foreign exchange.

Over the last three years, [removed: Abbott's] [added: Abbott’s] operating margin was positively impacted by margin improvements [removed: across] [added: in] various businesses, including Established [removed: Pharmaceuticals, Core Laboratory, and] [added: Pharmaceutical Products,] Diabetes Care, [removed: partially offset by higher amortization] [added: Rapid Diagnostics,] and [removed: other costs associated with the acquisitions.][added: Structural Heart.]

In 2018, [removed: Abbott's] [added: Abbott’s] operating margin increased by approximately 6 percentage points primarily due to operating margin improvement in various businesses and lower inventory step-up amortization and integration costs associated with the [removed: acquisitions, partially offset by higher intangible amortization.][added: acquisitions.]

[removed: Excluding the impact of foreign exchange, sales in the Cardiovascular and Neuromodulation] [added: Total Nutritional] Products [removed: segment] [added: sales] increased [removed: 4.9] [added: 4.8] percent in [removed: 2018] [added: 2019] and [removed: 207.4] [added: 4.9] percent in [removed: 2017.][added: 2018, excluding the impact of foreign exchange.]

The sales increase in 2018 was driven primarily by higher [added: Diabetes Care,] Structural Heart, Electrophysiology, and Neuromodulation sales.

Excluding the impact of the acquisition, as well as the impact of foreign exchange, sales in the [removed: Cardiovascular and Neuromodulation] [added: Diagnostic] Products segment [removed: were essentially unchanged] in [removed: 2017 versus the prior year.][added: 2018 increased 6.5 percent.]

In [removed: 2018,] [added: 2019,] operating earnings for this segment increased [removed: 9.9] [added: 7.7] percent.

Worldwide diagnostic sales increased [removed: 33.6] [added: 5.9] percent in [removed: 2018] [added: 2019] and [removed: 16.7] [added: 33.6] percent in [removed: 2017,] [added: 2018,] excluding the impact of foreign exchange.

Excluding the impact of the Alere acquisition, as well as the impact of foreign exchange, sales in the Diagnostic Products segment increased 6.5 percent in [removed: 2018 and 5.5 percent in 2017.][added: 2018.]

[removed: This] [added: The 2019 and 2018] growth includes the continued [removed: roll-out] [added: adoption by customers] of Alinity®, which is [removed: Abbott's] [added: Abbott’s] integrated family of next-generation diagnostic systems and solutions that are designed to increase efficiency by running more tests in less space, generating test results faster and minimizing human errors while continuing to provide quality results.

Abbott has regulatory approvals in the U.S., Europe, China, and other markets for the [removed: "Alinity c"] [added: “Alinity c”] and [removed: "Alinity i"] [added: “Alinity i”] instruments [added: and multiple assays] for clinical chemistry and immunoassay diagnostics, respectively.

[added: In 2019,] Abbott [removed: also] continued the roll-out [added: in Europe] of [removed: "Alinity s" for] [added: its “Alinity s”] blood and plasma [removed: screening.][added: screening system and received U.S. FDA approval for “Alinity s” and several testing assays.]

In [removed: Abbott's] [added: Abbott’s] worldwide nutritional products business, sales over the last three years were positively impacted by [removed: demographics such as an aging population and an increasing rate of chronic disease in developed markets and the rise of a middle class in many emerging markets, as well as by] numerous new product [removed: introductions] [added: introductions, including the roll-out of HMO in infant formula,] that leveraged [removed: Abbott's] [added: Abbott’s] strong brands.

In 2018, excluding the impact of foreign exchange, the nutritional business experienced above-market growth in the worldwide pediatric business driven by [removed: market leading brands] [added: the] Similac® and [removed: Pedialyte®] [added: Pedialyte brands] in the U.S. as well as growth across several markets in Asia.

Worldwide, adult nutrition sales increased in 2018 led by the growth of [removed: Ensure®, Abbott's market-leading complete and balanced nutrition brand,] [added: Ensure] and [removed: Glucerna®, Abbott's market-leading diabetes-specific nutrition brand.][added: Glucerna.]

Excluding the impact of foreign exchange, Established Pharmaceutical sales increased [removed: 7.0] [added: 7.3] percent in [removed: 2018] [added: 2019] and [removed: 9.5] [added: 7.0] percent in [removed: 2017.][added: 2018.]

Operating margins increased from [removed: 18.7] [added: 19.8] percent of sales in [removed: 2016] [added: 2017] to [removed: 20.2] [added: 20.1] percent in [removed: 2018] [added: 2019] primarily due to the continued focus on cost reduction [removed: initiatives.][added: initiatives, partially offset by the unfavorable impact of foreign exchange.]

In [removed: its diabetes business,] [added: July 2018,] Abbott received U.S. FDA approval [removed: for] [added: of] its FreeStyle [removed: Libre®] [added: Libre] 14 day sensor, making it the longest lasting wearable glucose sensor available.

In conjunction with the funding of the St. Jude Medical and Alere acquisitions and the assumption of St. Jude [removed: Medical's] [added: Medical’s] and [removed: Alere's] [added: Alere’s] existing debt, [removed: Abbott's] [added: Abbott’s] total short-term and long-term debt increased [removed: from approximately $9.0 billion at December 31, 2015] to $27.9 billion at December 31, 2017.

[removed: At the beginning of] [added: In] 2018, Abbott [removed: committed to reducing its debt levels and in 2018 Abbott] repaid approximately $8.3 billion of debt, net of borrowings, bringing its total debt to $19.6 [removed: billion.][added: billion at December 31, 2018.]

Abbott declared dividends of [removed: $1.16] [added: $1.32] per share in [removed: 2018] [added: 2019] compared to [removed: $1.075] [added: $1.16] per share in [removed: 2017,] [added: 2018,] an increase of approximately [removed: 8] [added: 14] percent.

Dividends paid totaled [removed: $1.974] [added: $2.270] billion in [removed: 2018] [added: 2019] compared to [removed: $1.849] [added: $1.974] billion in [removed: 2017.][added: 2018.]

The year-over-year change in the amount of dividends paid [added: primarily] reflects the increase in the dividend rate.

In December [removed: 2018,] [added: 2019,] Abbott increased the [removed: company's] [added: company’s] quarterly dividend by approximately [removed: 14] [added: 12.5] percent to [removed: $0.32] [added: $0.36] per share from [removed: $0.28] [added: $0.32] per share, effective with the dividend paid in February [removed: 2019.][added: 2020.]

In [removed: 2019,] [added: 2020,] Abbott will focus on continuing to invest in product development areas that provide the opportunity for strong sustainable growth over the next several years.

In the [removed: cardiovascular and neuromodulation] [added: medical devices] business, Abbott will continue to focus on expanding its market position in various areas including [added: diabetes care, structural heart,] electrophysiology, [removed: heart failure,] and [removed: structural heart.][added: heart failure.]

In the established pharmaceuticals business, Abbott will continue to focus on growing its business with the depth and breadth [added: of its portfolio in emerging markets.]

[removed: Critical] [added: Critical] Accounting [removed: Policies][added: Policies]

_Sales Rebates_ — In [removed: 2018,] [added: 2019,] approximately [removed: 45] [added: 44] percent of [removed: Abbott's] [added: 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 [removed: 2018] [added: 2019] are in the Nutritional Products and Diabetes Care [removed: segments.][added: businesses.]

Rebates and chargebacks charged against gross sales in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] amounted to approximately [removed: $3.0] [added: $3.1] billion, [removed: $2.8] [added: $3.0] billion and [removed: $2.5] [added: $2.8] billion, respectively, or [removed: 19.0] [added: 19.1] percent, [removed: 20.5] [added: 19.0] percent and [removed: 22.9] [added: 20.5] percent of gross sales, respectively, based on gross sales of approximately [removed: $16.0] [added: $16.3] billion, [removed: $13.9] [added: $16.0] billion and [removed: $10.7] [added: $13.9] billion, respectively, subject to rebate.

A one-percentage point increase in the percentage of rebates to related gross sales would decrease net sales by approximately [removed: $160] [added: $163] million in [removed: 2018.][added: 2019.]

Other allowances charged against gross sales were approximately [removed: $175] [added: $169] million, [removed: $166] [added: $175] million and [removed: $160] [added: $166] million for cash discounts in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively, and [removed: $191] [added: $192] million, [removed: $204] [added: $191] million and [removed: $242] [added: $204] million for returns in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

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A reduction in the costs associated with the recent business acquisitions also drove the improvement in operating margins from 2017 to 2019.

In 2019, Abbott’s operating margin increased by approximately 2 percentage points primarily due to lower intangible amortization expense and lower business integration and restructuring costs compared to 2018.

Beginning in the fourth quarter of 2019, the results of the Diabetes Care business, which had previously been included in the non-reportable segment category, were aggregated with the results of the businesses in the Cardiovascular and Neuromodulation segment to comprise the Medical Devices reportable segment.

Historic periods have been adjusted to reflect this change.

The sales increase in 2019 was driven primarily by higher Diabetes Care, Structural Heart, Electrophysiology and Heart Failure sales.

The operating margin profile increased from 29.2 percent of sales in 2017 to 30.8 percent in 2019 primarily due to sales volume growth and various cost improvement initiatives, partially offset by investment spending to drive the growth of new products.

In 2019, in the Medical Devices segment, product approvals from the U.S. Food and Drug Administration (FDA) included:

| | ● | the TactiCath® contact force ablation catheter, Sensor enabled™, which is designed to help physicians treat atrial fibrillation, a form of irregular heartbeat. |

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| | ● | a new, expanded indication for Abbott’s MitraClip® heart valve repair device to treat clinically significant secondary mitral regurgitation (MR) as a result of underlying heart failure. This new indication expands the number of people with MR that can be treated with the MitraClip device. |

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| | ● | the next-generation version of the MitraClip device, which includes a new leaflet grasping enhancement, an expanded range of clip sizes and facilitation of procedure assessment in real time to offer doctors further options when treating mitral valve disease. |

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| | ● | the Proclaim XR recharge-free neurostimulation system for people living with chronic pain which works by using low doses of mild electrical pulses to change pain signals as they travel from the spinal cord to the brain. |

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In March 2019, Abbott announced new data from its MOMENTUM 3 clinical study, the largest randomized controlled trial to assess outcomes in patients receiving a heart pump to treat advanced heart failure, which demonstrated Abbott's HeartMate 3® Left Ventricular Assist Device (LVAD) improved survival and clinical outcomes in this patient population.

In December 2019, Abbott received CE Mark approval in Europe for its next-generation high-voltage implantable cardioverter defibrillator (ICD) and cardiac resynchronization therapy defibrillator (CRT-D) devices.

In January 2020, Abbott received CE Mark approval in Europe for its Tendyne Transcatheter Mitral Valve Implantation system for the treatment of significant MR in patients requiring a heart valve replacement who are not candidates for open-heart surgery or transcatheter mitral valve repair.

Abbott has obtained regulatory approval for the “Alinity h” instrument for hematology in Europe and Japan.

In 2019, Abbott also announced that it had obtained CE Mark for its “Alinity m” (molecular) diagnostics system and several testing assays.

In 2019, operating earnings for the Diagnostics segment increased 2.3 percent.

The operating margin profile decreased from 26.1 percent of sales in 2017 to 24.8 percent in 2019 primarily due to dilution from the acquisition of Alere, the negative impact of foreign exchange, and costs to accelerate the roll-out of Alinity, partially offset by the continued focus on cost improvement.

Sales were also positively affected by demographics such as an aging population and an increasing rate of chronic disease in developed markets and the rise of a middle class in many emerging markets.

In 2019, excluding the impact of foreign exchange, total adult nutrition sales increased 6.6 percent 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, partially offset by the unfavorable impact of the discontinuation of a non-core product line in the U.S. In 2019, excluding the impact of foreign exchange, total pediatric nutrition sales increased 3.4 percent driven by the PediaSure® and Pedialyte® brands in the U.S. as well as infant and toddler product growth across several markets in Asia and Latin America, partially offset by challenging conditions in the Greater China market.

The sales increase in 2019 was driven by growth in several geographies including China, Brazil, Russia and India.

In 2019, Abbott repaid approximately $1.6 billion of debt, net of borrowings, bringing its total debt to $18.1 billion at December 31, 2019.

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| ​ | | ​ | | Business | | ​ | | ​ | | ​ |

| ​ | ​ | Total | ​ | Acquisitions/ | ​ | ​ | ​ | ​ | ​ | ​ |

| 2019 vs. 2018 | | 4.3 | | — | | 0.2 | | 7.3 | | (3.2) |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| 2019 vs. 2018 | | 5.2 | | — | | (0.4) | | 5.6 | | — |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| 2019 vs. 2018 | | 3.9 | | — | | 0.5 | | 8.3 | | (4.9) |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| 2019 vs. 2018 | | 1.4 | | — | | 3.0 | | 4.3 | | (5.9) |

In January 2017, Abbott acquired St. Jude Medical, Inc. (St. Jude Medical), a global medical device manufacturer, for approximately $23.6 billion, including approximately $13.6 billion in cash and approximately $10 billion in Abbott common shares, based on Abbott's closing stock price on the acquisition date.

As part of the acquisition, Abbott assumed, repaid or refinanced approximately $5.9 billion of St. Jude Medical's debt.

The combined business competes in nearly every area of the $30 billion global cardiovascular device market, as well as in neuromodulation which treats chronic pain and movement disorders.

In October 2017, Abbott acquired Alere Inc. (Alere), a diagnostic device and service provider, for $51.00 per common share in cash, which equated to a purchase price of approximately $4.5 billion.

The acquisition established Abbott as a leader in point of care testing, expanded Abbott's global diagnostics presence and provided access to new products, channels and geographies.

The operating results of AMO were included in Earnings from Continuing Operations up to the date of sale as the business did not qualify for reporting as discontinued operations.

In 2017, the acquisitions of St. Jude Medical and Alere, partially offset by the sale of AMO, contributed 26.5 percentage points of Abbott's total sales growth versus 2016.

In 2017, Abbott's

operating margin decreased by approximately 9 percentage points primarily due to costs associated with the acquisitions, including higher intangible amortization expense, inventory step-up amortization and integration costs, partially offset by operating margin improvement in various businesses.

Since the beginning of the first quarter of 2017, the results of Abbott's Cardiovascular and Neuromodulation Products segment include Abbott's historical Vascular Products segment and St. Jude Medical from the date of acquisition.

The sales increase in 2017 was driven by the acquisition of St. Jude Medical.

In 2017, higher structural heart and endovascular sales were offset by lower coronary stent sales and the comparison impact from the favorable 2016 resolution of a third-party royalty agreement in Abbott's vascular business.

The operating margin profile declined from 35.8 percent of sales in 2016 to 31.7 percent in 2018 primarily due to the mix of business resulting from the acquisition of St. Jude Medical and ongoing pricing pressures in the coronary business.

Cost improvement initiatives contributed to an improvement in the operating margin profile from 30.5 percent in 2017 to 31.7 percent in 2018.

In 2018, the Cardiovascular and Neuromodulation Products segment received approval or clearance from the U.S. Food and Drug Administration (FDA) for the following products:

the Advisor® HD Grid Mapping Catheter, Sensor Enabled™, which creates highly detailed maps of the heart and expands Abbott's electrophysiology product portfolio,

the next-generation version of Abbott's leading MitraClip® heart valve repair device,

the HeartMate 3® Left Ventricular Assist Device (LVAD) as a destination (long-term use) therapy, and

the XIENCE Sierra® Drug Eluting Stent System, which is the next generation of its drug-eluting coronary stent system.

The XIENCE Sierra Drug Eluting Stent System also received national reimbursement in Japan to treat people with coronary artery disease.

In 2018, Abbott accelerated the launch of Alinity in Europe and other international markets after a broad range of assays obtained regulatory approval and were added to the test menu.

Margin improvement continued to be a key focus for the Diagnostics business in 2018 and 2017.

While operating margins of 24.9 percent of sales in 2018 have remained relatively unchanged from the 24.8 percent of sales reported in 2016, this reflects dilution to the operating margin profit from the

acquisition of Alere and the negative impact of foreign exchange, offset by the continued execution of efficiency initiatives in the manufacturing and supply chain functions.

In 2017, the nutritionals business experienced growth in the U.S. driven by above-market performance in Abbott's infant and toddler brands.

Internationally, 2017 sales growth in China and India was partially offset by challenging market conditions in the infant formula market in various emerging markets.

With respect to the profitability of the nutritional products business, manufacturing and distribution process changes, as well as other cost reductions, drove margin improvements across the business over the last three years although such improvements were offset by inflation on commodity costs.

The decrease in operating margins for this business from 24.1 percent of sales in 2016 to 22.9 percent in 2018 was primarily due to negative impact of foreign exchange.

The sales increase in 2017 was primarily driven by double-digit growth in China and various countries in Latin America.

The FreeStyle Libre system is the only continuous glucose monitoring system that does not require any user calibration.

of its portfolio in emerging markets.

In its diabetes care business, Abbott will focus on driving continued market adoption of its FreeStyle Libre continuous glucose monitoring system.

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| 2017 vs. 2016 | | | 31.3 | | | 26.5 | | | (0.6 | ) | | 5.1 | | | 0.3 | |

| 2017 vs. 2016 | | | 49.1 | | | 46.9 | | | (0.9 | ) | | 3.1 | | | — | |

| 2017 vs. 2016 | | | 23.3 | | | 17.3 | | | (0.4 | ) | | 6.0 | | | 0.4 | |

| 2017 vs. 2016 | | | 11.1 | | | — | | | 2.3 | | | 7.2 | | | 1.6 | |

| 2017 vs. 2016 | | | 0.4 | | | — | | | 0.3 | | | 0.3 | | | (0.2 | ) |

[removed: Financial] [added: Financial] Instruments and Risk Management

[removed: Market] [added: Market] Price Sensitive [removed: Investments][added: Investments]

The fair value of equity securities held by Abbott with a readily determinable fair value was approximately [removed: $13] [added: $11] million and [removed: $11] [added: $13] million as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

A hypothetical 20 percent decrease in the share prices of these investments would decrease their fair value at December 31, [removed: 2018] [added: 2019] by approximately [removed: $3] [added: $2] million.

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 [removed: $307] [added: $346] million and [removed: $363] [added: $307] million as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

Changes in the fair value of these [removed: investments] [added: investments, as well as an offsetting change in the benefit obligation,] are recorded in earnings.

[removed: Non-Publicly] [added: Non-Publicly] Traded Equity [removed: Securities][added: Securities]

The carrying value of these investments was [removed: $211] [added: $158] million and [removed: $228] [added: $211] million as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

[removed: Interest] [added: Interest] Rate Sensitive Financial [removed: Instruments][added: Instruments]

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] Abbott had interest rate hedge contracts totaling $2.9 billion [removed: and $4.0 billion, respectively,] to manage its exposure to changes in the fair value of debt.

The fair value of long-term debt at December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] amounted to [removed: $19.9] [added: $20.8] billion and [removed: $29.0] [added: $19.9] billion, respectively (average interest rates of [removed: 3.5%] [added: 3.3%] and [removed: 3.6%] [added: 3.5%] as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively) with maturities through 2046.

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the fair value of current and long-term investment securities amounted to approximately [added: $1.2 billion and] $1.1 [removed: billion.][added: billion, respectively.]

[removed: Foreign] [added: Foreign] Currency Sensitive Financial [removed: Instruments][added: Instruments]

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] Abbott held [removed: $5.1] [added: $6.8] billion and [removed: $3.3] [added: $5.1] billion, respectively, of such contracts.

Contracts held at December 31, 2018 [removed: will mature] [added: matured] in 2019 or [added: will mature in] 2020 depending upon the contract.

Contracts held at December 31, [removed: 2017 matured in 2018 or] [added: 2019] will mature in [removed: 2019] [added: 2020 or 2021] depending upon the contract.

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] Abbott held [removed: $13.6] [added: $9.1] billion and [removed: $20.1] [added: $13.6] billion, respectively, of such contracts, which mature in the next [removed: 24] [added: 13] months.

In March 2017, Abbott repaid its $479 million [removed: foreign denominated] [added: yen-denominated] short-term debt which was designated as a hedge of the net [removed: investment in a foreign subsidiary.]

The following table reflects the total foreign currency forward [added: exchange] contracts outstanding at December 31, [removed: 2018] [added: 2019] and [removed: 2017:][added: 2018:]

| [removed: Primarily] [added: Primarily] U.S. Dollars to be exchanged for the following [removed: currencies: | | |] [added: currencies:] | | [added: ​] | | | | | [added: ​] | | | [added: ​] | | | | | [added: ​] | |

| Euro | [added: ​] | $ | [removed: 11,630 |] [added: 7,085] | | [removed: 1.1938] [added: 1.1189] | [added: ​] | $ | [removed: 13] [added: 65] | [added: ​] | $ | [removed: 16,877 |] [added: 11,630] | | [removed: 1.1861] [added: 1.1938] | [added: ​] | $ | [removed: (24 | )] [added: 13] |

| Chinese Yuan | [removed: | | 1,592 |] [added: ​] | | [removed: 6.9055] [added: 2,177] | | [added: 7.0216] | [removed: (10] [added: ​] | [removed: )] | [added: 4] | [removed: 1,221] [added: ​] | | [added: 1,592] | [removed: 6.8128] | [added: 6.9055] | [added: ​] | [removed: (33] | [removed: )] [added: (10)] |

| Japanese Yen | [removed: | | 1,079 |] [added: ​] | | [removed: 108.2188] [added: 1,092] | | [added: 106.8530] | [removed: 6] [added: ​] | | [added: 13] | [removed: 1,109] [added: ​] | | [added: 1,079] | [removed: 110.5370] | [added: 108.2188] | [added: ​] | [removed: 15] | [added: 6] |

| All other currencies | [removed: |] [added: ​] | [removed: 4,388] | [added: 5,532] | | n/a | [removed: |] [added: ​] | [removed: 10] | [added: (23)] | [added: ​] | [removed: 4,230] | [added: 4,388] | | n/a | [removed: |] [added: ​] | [removed: (25] | [removed: )] [added: 10] |

| Total | [added: ​] | $ | [removed: 18,689 |] [added: 15,886] | | | [added: ​] | $ | [removed: 19] [added: 59] | [added: ​] | $ | [removed: 23,437 |] [added: 18,689] | | | [added: ​] | $ | [removed: (67 | )] [added: 19] |

In November 2019, Abbott borrowed ¥59.8 billion under a 5-year term loan and designated the yen-denominated loan as a hedge of the net investment in certain foreign subsidiaries.

From the date of the borrowing through December 31, 2019, the value of this long-term debt decreased approximately $4 million to $546 million due to foreign exchange rate changes.

The change in the value was recorded in Accumulated other comprehensive income (loss), net of tax.

investment in a foreign subsidiary.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

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| ​ | ​ | 2019 | | | | | | | ​ | 2018 | | | | | | |

| ​ | | ​ | ​ | | Weighted | | Fair and | | | ​ | ​ | | Weighted | | Fair and | |

| ​ | ​ | ​ | ​ | ​ | Average | ​ | Carrying Value | | ​ | ​ | ​ | ​ | Average | ​ | Carrying Value | |

| ​ | ​ | Contract | | ​ | Exchange | ​ | Receivable/ | | ​ | Contract | | ​ | Exchange | ​ | Receivable/ | |

| (dollars in millions) | ​ | Amount | | ​ | Rate | ​ | (Payable) | | ​ | Amount | | ​ | Rate | ​ | (Payable) | |

| | | | | | | | | | | | | | | | | | | | |

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| | | 2018 | | | | | | | | | 2017 | | | | | | | | |

| (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) | | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

[removed: GENERAL] [added: GENERAL] DEVELOPMENT OF BUSINESS

[removed: NARRATIVE] [added: NARRATIVE] DESCRIPTION OF BUSINESS

Abbott has four reportable segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and [removed: Cardiovascular and Neuromodulation Products.][added: Medical Devices.]

On October 3, 2017, Abbott completed the acquisition of [removed: Alere,] [added: Alere] Inc., a diagnostic device and service provider, for an aggregate consideration of approximately $4.5 billion in cash.

[removed: Established] [added: Established] Pharmaceutical [removed: Products][added: Products]

[added: | | ● |] gastroenterology products, including Creon™, for the treatment of pancreatic exocrine insufficiency associated with several underlying conditions, including cystic fibrosis and chronic pancreatitis; Duspatal™ and [removed: Dicetel®,] [added: Dicetel™,] for the treatment of irritable bowel syndrome or biliary spasm; Heptral™, [removed: Transmetil®,] [added: Transmetil™,] and [removed: Samyr®,] [added: 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; [added: |]

[removed: women's] [added: | | ● | women’s] health products, including Duphaston™, for the treatment of many different gynecological disorders; and Femoston™, a hormone replacement therapy for postmenopausal women; [added: |]

[added: | | ● |] cardiovascular and metabolic products, including Lipanthyl™ and [removed: TriCor®,] [added: 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; [added: |]

[added: | | ● |] pain and central nervous system products, including Serc™, for the treatment of [removed: Ménière's] [added: Ménière’s] disease and vestibular vertigo; Brufen™, for the treatment of pain, fever, and [removed: inflammation,] [added: inflammation;] and [removed: Sevedol®,] [added: Sevedol™,] for the treatment of severe migraines; and [added: |]

[added: | | ● |] respiratory drugs and vaccines, including the anti-infective clarithromycin (sold under the trademarks [removed: Biaxin®,] [added: Biaxin™,] Klacid™, and Klaricid™); and Influvac™, an influenza vaccine. [added: |]

[added: *] As used throughout the text of this report on Form 10-K, the term [removed: "Abbott"] [added: “Abbott”] refers to Abbott Laboratories, an Illinois corporation, or Abbott Laboratories and its consolidated subsidiaries, as the context requires.

The Established Pharmaceutical Products segment directs its primary marketing efforts toward building [removed: a] strong [removed: brand] [added: brands] with key stakeholders, including consumers, pharmacists, physicians, and other healthcare providers.

[removed: Diagnostic Products][added: Diagnostic Products]

[added: | | ● |] core laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion, including the Alinity® family of instruments, ARCHITECT®, ABBOTT PRISM®, and Cell-Dyn®, with assays used for screening and/or diagnosis for cancer, cardiac, metabolics, drugs of abuse, fertility, general chemistries, infectious diseases such as hepatitis and HIV, and therapeutic drug monitoring; [added: |]

[added: | | ● |] molecular diagnostics systems, including [added: Alinity® m and] the [removed: m2000™, an instrument] [added: m2000™ instruments] that [removed: automates] [added: automate] the extraction, purification, and preparation of DNA and RNA from patient samples, and [removed: detects] [added: detect] and [removed: measures] [added: measure] infectious agents including HIV, HBV, HCV, HPV, and [removed: CT/NG;] [added: CT/NG/TV/MG;] and the Vysis® FISH product line of genomic-based tests; [added: |]

[added: | | ● |] point of care systems, including the i-STAT® and next-generation i-STAT® Alinity® and cartridges for blood analysis; [added: |]

[added: | | ● |] rapid diagnostics systems in the [removed: areas] [added: area] of infectious [removed: disease,] [added: diseases,] including [removed: respiratory illness such as] influenza, HIV, [added: HCV,] 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 influenza A & B, RSV and strep A, including the ID NOW™ rapid molecular system; cardiometabolic testing, including Afinion® and Cholestech™ platforms and tests; a toxicology business for drug and alcohol testing; and remote patient monitoring and consumer self-testing; and [added: |]

[added: | | ● |] informatics and automation solutions for use in laboratories, including laboratory automation systems, the RALS point of care solution, and AlinIQ™, a suite of informatics tools and professional services. [added: |]

[removed: Nutritional Products][added: Nutritional Products]

[added: | | ● |] various forms of prepared infant formula and follow-on formula, including [removed: Similac®,] [added: Similac®*,] Similac [removed: Pro-Advance®,] [added: Pro-Advance®*,] Similac® Advance®, Similac® Advance® Non-GMO, Similac [removed: Pro-Sensitive®,] [added: Pro-Sensitive®*,] Similac Sensitive®, Similac Sensitive® Non-GMO, Go&Grow by [removed: Similac®,] [added: Similac®*,] Similac® NeoSure®, Similac® Organic, Similac® Special Care®, [removed: Similac Total Comfort®, Similac® For Supplementation, Isomil® Advance®, Isomil®, Alimentum®, Gain™, Grow™, Similac En Mei Li™, and Eleva™;][added: |]

[added: | | ● |] 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, EleCare®, Juven®, Abound®, Pedialyte® and Zone Perfect®; and [added: |]

[added: | | ● |] 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®. [added: |]

These products include a broad line of rhythm management, electrophysiology, heart failure, vascular and structural heart devices for the treatment of cardiovascular diseases, [added: and diabetes care products for people with diabetes,] as well as neuromodulation devices for the management of chronic pain and movement disorders.

[removed: These products] [added: Medical devices] are manufactured, marketed and sold worldwide.

In the United States, [removed: these products] [added: depending upon the product, medical devices] are generally marketed and sold directly to [added: wholesalers,] hospitals, ambulatory surgery centers, [added: physicians’ offices,] and [removed: physicians' offices] [added: distributors] from Abbott-owned distribution centers and public warehouses.

The principal products included in the [removed: Cardiovascular and Neuromodulation Products] [added: Medical Devices] segment are:

[added: | | ● |] rhythm management products, including Assurity MRI® and Endurity MRI® pacemaker systems; Ellipse® and Fortify Assura® implantable cardioverter defibrillators and Quadra Assura MP® implantable cardioverter defibrillator with cardiac resynchronization therapy and MultiPoint® Pacing technology; [added: and Confirm Rx® implantable cardiac monitor; |]

[added: | | ● |] electrophysiology products, including the TactiCath® family of ablation catheters and FlexAbility® irrigated ablation catheters; Ampere® RF ablation generator; [removed: and] EnSite Precision® cardiac [added: mapping system; and the Advisor® HD Grid mapping catheter; |]

[added: | | ● |] heart failure related products, including the HeartMate™ left ventricular device family and the CardioMEMS® HF System pulmonary artery sensor, a heart failure monitoring system; [added: |]

[added: | | ● |] vascular products, including the XIENCE™ family of drug-eluting coronary stent systems developed on the Multi-Link Vision® platform; StarClose SE® and Perclose ProGlide® 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; and the OPTIS® integrated system with the Dragonfly OPTIS® imaging catheter and PressureWire® fractional flow reserve measurement systems; [added: |]

[added: | | ● |] structural heart products, including MitraClip®, a percutaneous mitral valve repair system; Trifecta® Valve with Glide™ Technology, a surgical tissue heart valve; Portico® transcatheter aortic heart [removed: valve,] [added: valve;] Regent™ mechanical heart [removed: valve, and] [added: valve;] AMPLATZER® PFO occluders; and [added: Tendyne® Transcatheter Mitral Valve Implantation (TMVI) system; |]

[added: | | ● |] neuromodulation products, including spinal cord stimulators [removed: Proclaim™] [added: Proclaim®] Elite [added: and Proclaim® XR] Recharge-free [removed: IPG] [added: implantable pulse generators (IPG)] and Prodigy MRI® IPG, [removed: both] [added: 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. [added: |]

[removed: The Cardiovascular and Neuromodulation Products segment's] [added: 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.

[removed: The principal products in Abbott's other businesses include] [added: | | ● |] continuous glucose and blood glucose monitoring systems, including test strips, sensors, data management decision software, and accessories for people with diabetes, under the FreeStyle® brand such as the FreeStyle Libre® [removed: system.][added: system; and |]

[removed: INFORMATION] [added: INFORMATION] WITH RESPECT TO [removed: ABBOTT'S] [added: ABBOTT’S] BUSINESS IN GENERAL

[removed: Sources] [added: Sources] and Availability of Raw [removed: Materials][added: Materials]

[removed: Patents,] [added: Patents,] Trademarks, and [removed: Licenses][added: Licenses]

Accordingly, where possible, patents and trademarks are sought and obtained for [removed: Abbott's] [added: Abbott’s] products in the United States [added: and countries of interest to Abbott.]

These, and various patents which expire during the period [removed: 2019] [added: 2020] to [removed: 2039,] [added: 2040,] in the aggregate, are believed to be of material importance in the operation of [removed: Abbott's] [added: Abbott’s] business.

[removed: Seasonal] [added: Seasonal] Aspects, Customers, Backlog, and [removed: Renegotiation][added: Renegotiation]

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| | | Similac Total Comfort®*, Similac® For Supplementation, Isomil® Advance®, Isomil®, Alimentum®, Gain™, Grow™, Similac En Mei Li™, and Eleva™; |

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* These products are available with 2'‐FL HMO (Human Milk Oligosaccharide) in several markets.

Medical Devices

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The government follows a diagnosis-related group (DRG)

In the United States, this could include potential modification or repeal of all or parts of the Affordable Care Act.

Cardiovascular and Neuromodulation Products

mapping system; Confirm Rx® implantable cardiac monitor; and the Advisor® HD Grid mapping catheter;

Other Products

These products are marketed worldwide and generally sold directly to wholesalers, government agencies, private health care organizations, health care facilities, mail order pharmacies, and independent retailers from Abbott-owned distribution centers and public warehouses.

Some of these products are also marketed and distributed through distributors.

Blood and continuous glucose monitoring systems are also marketed and sold to consumers.

These products are subject to regulatory changes and competition in technological innovation, price, convenience of use, service, and product performance.

and countries of interest to Abbott.

implemented from time to time.

In January 2018, the excise tax was suspended for an additional two years.

UNITED [removed: STATES][added: STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: WASHINGTON,] [added: WASHINGTON,] D. C. 20549

[removed: FORM 10-K][added: FORM 10-K]

| (MARK ONE) | [removed: |] [added: ​] |

| [removed: ý |] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| [removed: o |] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018 |] [added: 2019] | Commission file [removed: number 1-2189] [added: number 1-2189] |

| [removed: An Illinois Corporation |] [added: An Illinois Corporation] | 36-0698440 |

| 100 Abbott Park [removed: Road Abbott Park, Illinois 60064-6400 |] [added: RoadAbbott Park, Illinois 60064-6400] | (I.R.S. employer identification number) [removed: (224) 667-6100 (telephone] [added: (224) 667-6100(telephone] number) |

| Title of Each Class | [added: Trading Symbol(s)] | Name of Each Exchange on Which Registered |

| Common Shares, Without Par Value | [added: ABT] | New York Stock Exchange Chicago Stock [removed: Exchange] [added: Exchange, Inc.] |

[removed: Yes ý No o][added: | Yes ⌧ | | No ◻ |]

[removed: Yes o No ý][added: | Yes ◻ | | No ⌧ |]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ [removed: 229.405] [added: 232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

| Large Accelerated [removed: Filer ý |] [added: Filer ⌧] | Accelerated [removed: Filer o |] [added: Filer ◻] | Non-Accelerated [removed: Filer o |] [added: Filer ◻] | Smaller reporting [removed: company o Emerging] [added: company ☐Emerging] growth [removed: company o] [added: company ☐] |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange [removed: Act.][added: Act. ◻]

The aggregate market value of the [removed: 1,710,210,374] [added: 1,723,621,480] shares of voting stock held by nonaffiliates of the registrant, computed by reference to the closing price as reported on the New York Stock Exchange, as of the last business day of Abbott [removed: Laboratories'] [added: Laboratories’] most recently completed second fiscal quarter (June [removed: 30, 2018), was $104,305,730,710.][added: 28, 2019), was $144,956,566,468.]

Portions of the [removed: 2019] [added: 2020] Abbott Laboratories Proxy Statement are incorporated by reference into Part III.

The Proxy Statement will be filed on or about March [removed: 15, 2019.][added: 13, 2020.]

[removed: PART] [added: PART] I

​

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| OR | |

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| Yes ⌧ | | No ◻ |

| Yes ⌧ | | No ◻ |

| --- | --- | --- |

| --- | --- | --- | --- |

| Yes ☐ | | No ☒ |

| --- | --- | --- |

Number of common shares outstanding as of January 31, 2020: 1,763,433,243

​

​

​

10-K 1 a2237733z10-k.htm 10-K

| | | |

| OR | | |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

ý

| | | | | | | |

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o

Number of common shares outstanding as of January 31, 2019: 1,756,470,269

As of December 31, [removed: 2018,] [added: 2019,] Abbott owned or leased properties totaling approximately 42 million square feet, of which approximately 70% is owned by Abbott.

Abbott operates [removed: 94] [added: 92] manufacturing facilities globally.

| Reportable Segments | [removed: | Manufacturing Sites |] [added: ​] | [added: Sites] |

| Diagnostic Products | | [removed: |] 23 | [removed: |]

| Established Pharmaceutical Products | | [removed: | 30 |] [added: 28] |

| Nutritional Products | | [removed: |] 14 | [removed: |]

| Worldwide Total | | [removed: | 94 |] [added: 92] |

| ​ | ​ | ​ |

| --- | --- | --- |

| ​ | | Manufacturing |

| Medical Devices | | 27 |

| | | | | |

| --- | --- | --- | --- | --- |

| Cardiovascular and Neuromodulation Products | | | 25 | |

| Non-Reportable | | | 2 | |

| ​ | ​ | ​ | ​ | ​ |

Each [added: executive] officer holds office until a successor has been duly elected or appointed and qualified or until the [removed: officer's] [added: officer’s] death, resignation, or removal.

Any [added: executive] officer may be removed by the board of directors when, in its judgment, removal would serve the best interests of Abbott.

[removed: Abbott's] [added: Abbott’s] executive officers, their ages as of February [removed: 22, 2019,] [added: 21, 2020,] and the dates of their first election as officers of Abbott are listed below.

There are no family relationships between any [removed: corporate] [added: executive] officers or directors.

[removed: Miles] [added: Miles] D.

White, [removed: 63][added: 64]

[removed: Robert] [added: Robert] B.

Ford, [removed: 45][added: 46]

2018 to present — President and Chief Operating [removed: Officer.][added: Officer, and Director since 2019.]

[removed: 2008] [added: 2015] to [removed: 2014] [added: 2019] — Vice President, Diabetes Care, Commercial Operations.

[removed: Hubert] [added: Hubert] L.

Allen, [removed: 53][added: 54]

[removed: Brian J.][added: Brian B.]

[removed: 2012] [added: 2019] to present — Executive Vice President, [removed: Diagnostics Products.][added: Medical Devices.]

[removed: John] [added: John] M.

Capek, [removed: 57][added: 58]

[removed: 2013] [added: 2019] to present — Executive Vice President, Human Resources.

Elected Corporate Officer — [removed: 1999.][added: 2019.]

[removed: Andrew] [added: Andrew] H.

Lane, [removed: 48][added: 49]

[removed: Daniel] [added: Daniel] Salvadori, [removed: 40][added: 41]

[removed: Brian] [added: Brian] B.

Yoor, [removed: 49][added: 50]

Elected Corporate Officer — [removed: 2013.][added: 2019.]

[removed: Roger] [added: Roger] M.

Bird, [removed: 62][added: 63]

[removed: 2017] [added: 2019] to present — Senior Vice President, Rapid Diagnostics.

[removed: Charles] [added: Charles] R.

Brynelsen, [removed: 62][added: 63]

[removed: Jaime] [added: Jaime] Contreras, [removed: 62][added: 63]

[removed: Robert] [added: Robert] E.

Funck, [removed: 57][added: Jr., 58]

[removed: Sammy] [added: Sammy] Karam, [removed: 57][added: 58]

[removed: Joseph] [added: Joseph] Manning, [removed: 50][added: 51]

Michael [removed: J.][added: D.]

Pederson, [removed: 57][added: 58]

[removed: 2017] [added: 2019] to present — Senior Vice President, [removed: CRM] [added: Electrophysiology] and [removed: AF/EP.][added: Heart Failure.]

[removed: Jared] [added: Jared] L.

Watkin, [removed: 51][added: 52]

[removed: Alejandro] [added: Alejandro] D.

​

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

White will step down as Chief Executive Officer on March 31, 2020.

The board of directors appointed Mr. White as Executive Chairman and Robert B.

Ford as President and Chief Executive Officer, each effective March 31, 2020.

Yoor will retire as an officer of Abbott, effective February 29, 2020.

The board of directors appointed Robert E.

Funck, Jr. as Executive Vice President, Finance and Chief Financial Officer and Philip P.

Boudreau as Vice President, Finance and Controller, each effective March 1, 2020.

Miles D.

Lisa D.

Earnhardt, 50

2008 to 2019 — President, CEO, and Director, Intersect ENT (a medical technology company focused on developing treatments for ear, nose and throat conditions).

John F.

Ginascol, 61

2019 to present — Executive Vice President, Core Diagnostics.

2008 to 2019 — Vice President, Nutrition, Supply Chain.

Mary K.

Moreland, 53

2013 to 2019 — Divisional Vice President, Compensation, Benefits and HR M&A.

Andrea Wainer, 51

2019 to present — Executive Vice President, Rapid and Molecular Diagnostics.

2015 to 2019 — Vice President, Molecular Diagnostics.

Dale, 60

2019 to present — Senior Vice President, Structural Heart.

2017 to 2019 — Vice President, Structural Heart.

2016 to 2017 — Divisional Vice President and General Manager, Structural Heart.

2014 to 2016 — President and Chief Executive Officer, GI Dynamics, Inc. (a medical device company focused on developing gastrointestinal therapies).

Michael J.

2017 to 2019 — Senior Vice President, Cardiac Arrhythmias and Heart Failure.

Christopher J.

Scoggins, 50

2011 to 2015 — Divisional Vice President, EMEA Commercial Operations, ADC.

Elected Corporate Officer — 2015.

Elected Corporate Officer — 2015.

Elected Corporate Officer — 2017.

Randel W.

Woodgrift, 58

2019 to present — Senior Vice President, CRM.

2017 to 2019 — Vice President, Global Operations, Cardiovascular and Neuromodulation.

EXECUTIVE OFFICERS OF THE REGISTRANT

All other officers are elected by the board or appointed by the chairman of the board.

All officers are either elected at the first meeting of the board of directors held after the annual shareholder meeting or appointed by the chairman after that board meeting.

Any officer appointed by the chairman of the board may be removed by the chairman whenever, in the chairman's judgment, removal would serve the best interests of Abbott.

A vacancy in any office appointed by the chairman of the board may be filled by the chairman.

Blaser, 54

Stephen R.

Fussell, 61

2011 to 2014 — Vice President, Asia Pacific, Takeda Pharmaceutical Company Limited (a Japanese pharmaceutical company).

2013 to 2014 — Chief Executive Officer, Latin America, CFR Pharmaceuticals S.A. (a Latin American pharmaceutical company).

Sharon J.

Bracken, 48

2013 to 2017 — Vice President, Diagnostics, Abbott Point of Care.

2010 to 2014 — Regional Director Southern Europe, Russia, Ukraine, CIS, Australia and New Zealand, Omega Pharma NV (a Belgian healthcare products company).

2009 to 2014 — General Manager, Russia, Nutritional Products.

2012 to 2014 — General Manager, Argentina, Bolivia, Paraguay and Uruguay, CFR Pharmaceuticals S.A. (a Latin American pharmaceutical company).

[removed: Principal Market][added: Principal Market]

[removed: Shareholders][added: Shareholders]

There were [removed: 42,827] [added: 38,990] shareholders of record of Abbott common shares as of December 31, [removed: 2018.][added: 2019.]

[removed: Tax] [added: Tax] Information for [removed: Shareholders][added: Shareholders]

Abbott certified that the HIB requirements were met for the calendar year ending December 31, [removed: 2018.][added: 2019.]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

[added: | (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. [added: |]

[added: | (2) |] On September 11, 2014, [removed: Abbott announced that its] [added: the] board of directors [removed: approved] [added: authorized] the [removed: purchase] [added: repurchase] of up to $3 billion of its common shares, from time to [removed: time.][added: time (the “2014 Plan”). On October 11, 2019, the board of directors authorized the repurchase of up to $3 billion of Abbott common shares, from time to time (the “2019 Plan”). The 2019 Plan is in addition to the unused portion of the 2014 Plan. |]

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ​ | | ​ | | ​ | ​ | | (c) Total Number of | | (d) Maximum Number (or | | |

| ​ | ​ | (a) Total Number | ​ | ​ | ​ | ​ | Shares (or Units) | ​ | Approximate Dollar Value) of | | |

| ​ | ​ | of Shares | ​ | (b) Average Price | | ​ | Purchased as Part of | ​ | Shares (or Units) that May | | |

| ​ | ​ | (or Units) | ​ | Paid per Share | | ​ | Publicly Announced | ​ | Yet Be Purchased Under the | | |

| Period | ​ | Purchased | ​ | (or Unit) | | ​ | Plans or Programs | ​ | Plans or Programs | | |

| October 1, 2019 — October 31, 2019 | | 2,675,000 | (1) | $ | 81.950 | | 2,675,000 | ​ | $ | 3,576,018,444 | (2) |

| November 1, 2019 — November 30, 2019 | | 1,786,605 | (1) | $ | 82.928 | | 1,786,605 | ​ | $ | 3,427,858,606 | (2) |

| December 1, 2019 — December 31, 2019 | | 1,844,839 | (1) | $ | 85.440 | | 1,844,839 | ​ | $ | 3,270,234,923 | (2) |

| Total | | 6,306,444 | (1) | $ | 83.248 | | 6,306,444 | ​ | $ | 3,270,234,923 | (2) |

| --- | --- |

| --- | --- |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 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, 2018 — October 31, 2018 | | | 0 | (1) | | — | | | 0 | | $ | 925,131,209 | (2) |

| November 1, 2018 — November 30, 2018 | | | 13,140 | (1) | $ | 68.580 | | | 0 | | $ | 925,131,209 | (2) |

| December 1, 2018 — December 31, 2018 | | | 1,886,483 | (1) | $ | 68.856 | | | 1,886,483 | | $ | 795,235,049 | (2) |

| Total | | | 1,899,623 | (1) | $ | 68.854 | | | 1,886,483 | | $ | 795,235,049 | (2) |

(1)

These shares include:

(i)

the shares deemed surrendered to Abbott to pay the exercise price in connection with the exercise of employee stock options — 0 in October, 812 in November, and 0 in December; and

(ii)

the shares purchased on the open market for the benefit of participants in the Abbott Laboratories, Limited Employee Stock Purchase Plan — 0 in October, 12,328 in November, and 0 in December.

(2)

| [added: ​] | [added: ​] | Year Ended December 31 | | | | | | | | | | | | | | [removed: |]

| [added: ​] | | [added: 2019 | | |] 2018 | | | 2017 | | | 2016 | | | 2015 | | [removed: | 2014 | | |]

| Net sales [removed: (1)] | [added: ​] | $ | [removed: 30,578] [added: 31,904] | [added: ​] | $ | [removed: 27,390] [added: 30,578] | [added: ​] | $ | [removed: 20,853] [added: 27,390] | [added: ​] | $ | [removed: 20,405] [added: 20,853] | [added: ​] | $ | [removed: 20,247 |] [added: 20,405] |

| Earnings from continuing operations [removed: (1)] | [added: ​] | | [added: 3,687 | ​ | |] 2,334 | [added: ​] | | 353 | [added: ​] | | 1,063 | [added: ​] | | 2,606 | [removed: | | 1,721 | |]

| Net earnings | [added: ​] | | [added: 3,687 | ​ | |] 2,368 | [added: ​] | | 477 | [added: ​] | | 1,400 | [added: ​] | | 4,423 | [removed: | | 2,284 | |]

| Basic earnings per common share from continuing operations [removed: (1)] | [added: ​] | | [added: 2.07 | ​ | |] 1.32 | [added: ​] | | 0.20 | [added: ​] | | 0.71 | [added: ​] | | 1.73 | [removed: | | 1.13 | |]

| Basic earnings per common share | [added: ​] | | [added: 2.07 | ​ | |] 1.34 | [added: ​] | | 0.27 | [added: ​] | | 0.94 | [added: ​] | | 2.94 | [removed: | | 1.50 | |]

| Diluted earnings per common share from continuing operations [removed: (1)] | [added: ​] | | [added: 2.06 | ​ | |] 1.31 | [added: ​] | | 0.20 | [added: ​] | | 0.71 | [added: ​] | | 1.72 | [removed: | | 1.12 | |]

| Diluted earnings per common share | [added: ​] | | [added: 2.06 | ​ | |] 1.33 | [added: ​] | | 0.27 | [added: ​] | | 0.94 | [added: ​] | | 2.92 | [removed: | | 1.49 | |]

| Total assets | [added: ​] | | [added: 67,887 | ​ | |] 67,173 | [added: ​] | | 76,250 | [added: ​] | | 52,666 | [added: ​] | | 41,247 | [removed: | | 41,207 | |]

| [removed: Long-term] [added: Long‑term] debt, including current portion | [added: ​] | | [added: 17,938 | ​ | |] 19,366 | [added: ​] | | 27,718 | [added: ​] | | 20,684 | [added: ​] | | 5,874 | [removed: | | 3,448 | |]

| Cash dividends declared per common share | [added: ​] | | [added: 1.32 | ​ | |] 1.16 | [added: ​] | | 1.075 | [added: ​] | | 1.045 | [added: ​] | | 0.98 | [removed: | | 0.90 | |]

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

(1)

Amounts reflect Abbott's developed markets branded generics pharmaceuticals, animal health and former research-based pharmaceuticals business as discontinued operations.

| [added: ​] | | Page | [removed: | |]

[removed: | [](#fe75401_abbott_laboratories_and_subsid__abb03831) [Consolidated] [added: Consolidated] Statement of Comprehensive [removed: Income](#fe75401_abbott_laboratories_and_subsid__abb03831) | | | [51](#fe75401_abbott_laboratories_and_subsid__abb03831) | |][added: Income]

[removed: | [](#fg75401_abbott_laboratories_and_subsid__abb03416) [Consolidated] [added: Consolidated] Statement of Cash [removed: Flows](#fg75401_abbott_laboratories_and_subsid__abb03416) | | | [52](#fg75401_abbott_laboratories_and_subsid__abb03416) | |][added: Flows]

[removed: | [](#Balance) [Consolidated] [added: Consolidated] Balance [removed: Sheet](#Balance) | | | [53](#Balance) | |][added: Sheet]

[removed: | [](#fm75401_abbott_laboratories_and_subsid__abb05311) [Consolidated] [added: Consolidated] Statement of [removed: Shareholders' Investment](#fm75401_abbott_laboratories_and_subsid__abb05311) | | | [55](#fm75401_abbott_laboratories_and_subsid__abb05311) | |][added: Shareholders’ Investment]

[removed: | [](#fo75401_abbott_laboratories_and_subsid__abb03224) [Notes] [added: Notes] to Consolidated Financial [removed: Statements](#fo75401_abbott_laboratories_and_subsid__abb03224) | | | [56](#fo75401_abbott_laboratories_and_subsid__abb03224) | |][added: Statements]

[removed: | [](#ga75401_management_report_on_internal___man02570) [Management] [added: Management] Report on Internal Control Over Financial [removed: Reporting](#ga75401_management_report_on_internal___man02570) | | | [95](#ga75401_management_report_on_internal___man02570) | |][added: Reporting]

[removed: | [](#Report1) [Report] [added: Report] of Independent Registered Public Accounting [removed: Firm](#Report1) | | | [96](#Report1) | |][added: Firm]

[removed: | [](#Report2) [Report] [added: Report] of Independent Registered Public Accounting [removed: Firm](#Report2) | | | [97](#Report2) | |][added: Firm]

[removed: Abbott] [added: Abbott] Laboratories and [removed: Subsidiaries][added: Subsidiaries]

[removed: Consolidated] [added: Consolidated] Statement of [removed: Earnings][added: Earnings]

| [added: ​] | [added: ​] | Year Ended December 31 | | | | | | | | [removed: |]

| [removed: |] [added: ​] | [removed: 2018] | [added: 2019] | | [removed: 2017] | [added: 2018] | | [removed: 2016] | [added: 2017] | |

| Net Sales | [added: ​] | $ | [removed: 30,578] [added: 31,904] | [added: ​] | $ | [removed: 27,390] [added: 30,578] | [added: ​] | $ | [removed: 20,853 |] [added: 27,390] |

| Cost of products sold, excluding amortization of intangible assets | [removed: |] [added: ​] | [removed: 12,706] | [added: 13,231] | [added: ​] | [removed: 12,409] | [added: 12,706] | [added: ​] | [removed: 9,094] | [added: 12,409] |

| Amortization of intangible assets | [removed: |] [added: ​] | [removed: 2,178] | [added: 1,936] | [added: ​] | [removed: 1,975] | [added: 2,178] | [added: ​] | [removed: 550] | [added: 1,975] |

| Research and development | [removed: |] [added: ​] | [removed: 2,300] | [added: 2,440] | [added: ​] | [removed: 2,260] | [added: 2,300] | [added: ​] | [removed: 1,447] | [added: 2,260] |

| Selling, general and administrative | [removed: |] [added: ​] | [removed: 9,744] | [added: 9,765] | [added: ​] | [removed: 9,182] | [added: 9,744] | [added: ​] | [removed: 6,736] | [added: 9,182] |

| Total Operating Cost and Expenses | [removed: |] [added: ​] | [removed: 26,928] | [added: 27,372] | [added: ​] | [removed: 25,826] | [added: 26,928] | [added: ​] | [removed: 17,827] | [added: 25,826] |

| Operating Earnings | [removed: |] [added: ​] | [removed: 3,650] | [added: 4,532] | [added: ​] | [removed: 1,564] | [added: 3,650] | [added: ​] | [removed: 3,026] | [added: 1,564] |

| Interest expense | [removed: |] [added: ​] | [removed: 826] | [added: 670] | [added: ​] | [removed: 904] | [added: 826] | [added: ​] | [removed: 431] | [added: 904] |

| Interest income | [removed: |] [added: ​] | [removed: (105] | [removed: )] [added: (94)] | [added: ​] | [removed: (124] | [removed: )] [added: (105)] | [added: ​] | [removed: (99] | [removed: )] [added: (124)] |

| Net foreign exchange (gain) loss | [removed: |] [added: ​] | [removed: 28] | [added: 7] | [added: ​] | [removed: (34] | [removed: )] [added: 28] | [added: ​] | [removed: 495] | [added: (34)] |

| Debt extinguishment costs | [added: ​] | [added: ​] | [removed: 167] [added: 63] | [added: ​] | [added: ​] | [removed: —] [added: 167] | [added: ​] | [added: ​] | — | [removed: |]

| Other (income) expense, net | [removed: |] [added: ​] | [removed: (139] | [removed: )] [added: (191)] | [added: ​] | [removed: (1,413] | [removed: )] [added: (139)] | [added: ​] | [removed: 786] | [added: (1,413)] |

| Earnings from Continuing Operations Before Taxes | [removed: |] [added: ​] | [removed: 2,873] | [added: 4,077] | [added: ​] | [removed: 2,231] | [added: 2,873] | [added: ​] | [removed: 1,413] | [added: 2,231] |

| Taxes on Earnings from Continuing Operations | [removed: |] [added: ​] | [removed: 539] | [added: 390] | [added: ​] | [removed: 1,878] | [added: 539] | [added: ​] | [removed: 350] | [added: 1,878] |

| Earnings from Continuing Operations | [removed: |] [added: ​] | [removed: 2,334] | [added: 3,687] | [added: ​] | [removed: 353] | [added: 2,334] | [added: ​] | [removed: 1,063] | [added: 353] |

| [added: Net] Earnings from Discontinued Operations, net of taxes | [removed: |] [added: ​] | [removed: 34] | [added: —] | [added: ​] | [removed: 124] | [added: 34] | [added: ​] | [removed: 321] | [added: 124] |

| [removed: Net] [added: Taxes on] Earnings [removed: from Discontinued Operations, net of taxes |] [added: From Continuing Operations:] | | [removed: 34] [added: ​] | [added: ​] | | [removed: 124] [added: ​] | [added: ​] | | [removed: 337] [added: ​] | [added: ​] |

| Net Earnings | [added: ​] | $ | [removed: 2,368] [added: 3,687] | [added: ​] | $ | [removed: 477] [added: 2,368] | [added: ​] | $ | [removed: 1,400 |] [added: 477] |

| Basic Earnings Per Common Share [removed: — |] [added: --] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |