ABBOTT LABORATORIES
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
ABT$109.93-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001628280-24-020011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001628280-24-033740
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 46 previous paragraphs and 49 current paragraphs.
15 unchanged; 29 reworded; 4 added; 1 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
In April 2024, Abbott announced FDA approval of the Esprit™ below-the-knee (BTK) system, which is designed to keep arteries open in people living with peripheral artery disease and deliver a drug to support vessel healing prior to completely dissolving. In April, Abbott also announced FDA approval of TriClip™, which provides a minimally invasive treatment option for patients with tricuspid regurgitation, or a leaky tricuspid heart valve. In June, Abbott obtained CE Mark for its AVEIR®dual chamber (DR) leadless pacemaker system, which is the world's first dual chamber leadless pacemaker system that treats people with abnormal or slow heart rhythms.
Current report
In June 2024, Abbott received a SNOD from the IRS for the 2017 and 2018 Federal tax years in the amount of $192 million. The matters proposed in the 2017/2018 SNOD are substantially similar to the income allocation adjustments included in the 2019 SNOD. Abbott intends to file a petition with the U.S. Tax Court contesting the 2017/2018 SNOD in a manner consistent with its petition for the 2019 SNOD.
Current report
In June 2024, Abbott received a Revenue Agent’s Report (RAR) from the IRS for the 2020 Federal tax year assessing an additional $443 million of income tax. The primary adjustments proposed in the RAR are substantially similar to the income allocation adjustments included in the 2017/2018 and 2019 SNODs. Abbott believes that the income reallocation adjustments proposed in the RAR are without merit. The RAR also contains other proposed adjustments and omissions that Abbott believes are erroneous and unsupported. In addition to the tax assessment for the 2020 tax year, the 2020 RAR also contested a deduction for which an estimated $440 million cash tax benefit would be available in a different taxable year as allowed under applicable U.S. tax law. Abbott is contesting these RAR findings and intends to continue to do so.
Current report
On June 26, 2024, Abbott modified its existing, yen-denominated 5-year term loan scheduled to mature in November 2024. The amended terms include a net increase in principal debt from ¥59.8 billion to ¥92.0 billion, with a new maturity date in June 2029. The modified, 5-year term loan bears interest at the Tokyo Interbank Offered Rate (TIBOR) plus a fixed spread, and the interest rate is reset quarterly. The net proceeds equated to approximately $201 million. The ¥92.0 billion loan is designated as a hedge of Abbott’s net investment in certain foreign subsidiaries.
Removed paragraphs (1)
Previous report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Reworded paragraphs (29)
Previous wording
The following tables detail sales by reportable segment for the three months ended March 31. Percent changes are versus the prior year and are based on unrounded numbers.
Current wording
The following tables detail sales by reportable segment for the three and six months ended June 30. Percent changes are versus the prior year and are based on unrounded numbers.
Previous wording
The 5.1 percent increase in total net sales during the first three months of 2024, excluding the impact of foreign exchange, reflected higher sales primarily in the Medical Devices and Established Pharmaceuticals segments, partially offset by a decrease in demand for Abbott’s rapid diagnostic tests to detect COVID-19. Abbott’s COVID-19 testing-related sales totaled $204 million during the first quarter of 2024 and $730 million during the first quarter of 2023. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales increased 8.2 percent. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased 11.3 percent. In the first quarter of 2024, Abbott’s net sales were unfavorably impacted by changes in foreign exchange rates as the relatively stronger U.S. dollar decreased total international sales by 4.8 percent and total sales by 2.9 percent.
Current wording
The 7.5 percent increase in total net sales during the second quarter of 2024, excluding the impact of foreign exchange, reflected higher sales in the Medical Devices, Nutritional Products, and Established Pharmaceutical Products segments, partially offset by a decrease in demand for Abbott’s rapid diagnostic tests to detect COVID-19. Abbott’s COVID-19 testing-related sales totaled $102 million during the second quarter of 2024 and $263 million during the second quarter of 2023. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales increased 5.7 percent. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased 9.3 percent. Abbott’s net sales were unfavorably impacted by changes in foreign exchange rates in the second quarter as the relatively stronger U.S. dollar decreased total international sales by 5.6 percent and total sales by 3.5 percent.
Previous wording
The table below provides detail by sales category for the three months ended March 31. Percent changes are versus the prior year and are based on unrounded numbers.
Current wording
The table below provides detail by sales category for the six months ended June 30. Percent changes are versus the prior year and are based on unrounded numbers.
Previous wording
Excluding the unfavorable effect of foreign exchange, sales in the Key Emerging Markets for Established Pharmaceutical Products increased 15.4 percent in the first three months of 2024, led by growth in several countries and across several therapeutic areas, including respiratory, women's health, and central nervous system/pain management. Other Emerging Markets, excluding the effect of foreign exchange, increased by 8.2 percent in the first three months of 2024.
Current wording
Excluding the unfavorable effect of foreign exchange, sales in Key Emerging Markets for Established Pharmaceutical Products increased 12.0 percent in the first six months of 2024, led by higher revenue in several countries and across several therapeutic areas, including respiratory, gastroenterology, cardiometabolic and central nervous system/pain management. Other Emerging Markets, excluding the effect of foreign exchange, increased by 6.9 percent in the first six months of 2024.
Previous wording
Excluding the impact of foreign exchange, total Nutritional Products sales in the first three months of 2024 increased 7.7 percent. In U.S. Pediatric Nutritionals, the 12.0 percent increase in sales in the first three months of 2024 reflects the continued progress in recovering market share following the voluntary recall of certain infant formula products in the first quarter of 2022, partially offset by a decrease in PediaSure® and Pedialyte® sales. Excluding the effect of foreign exchange, the 8.9 percent increase in International Pediatric Nutritional sales in the first three months of 2024 primarily reflects growth in Canada and several countries in Asia Pacific and Latin America.
Current wording
Excluding the impact of foreign exchange, total Nutritional Products sales in the first six months of 2024 increased 7.4 percent. In U.S. Pediatric Nutritionals, the 11.6 percent increase in sales in the first six months of 2024 reflects infant formula market share gains and the continued favorable impact of 2023 price increases, partially offset by a decrease in PediaSure® and Pedialyte® product sales. Excluding the effect of foreign exchange, the 3.7 percent increase in International Pediatric Nutritional sales in the first six months of 2024 primarily reflects growth in Canada and several countries in the Asia Pacific and Europe/Middle East regions.
Previous wording
Excluding the effect of foreign exchange, the increases of 3.0 percent in U.S. Adult Nutritionals and 6.4 percent in International Adult Nutritionals in the first three months of 2024 reflect growth of Ensure® and Glucerna® product sales.
Current wording
In the first six months of 2024, U.S. Adult Nutritionals sales increased 0.8 percent as growth of Ensure® product sales was offset by a decrease in Glucerna® product sales and the discontinuation of the ZonePerfect® product line. Excluding the effect of foreign exchange, the 10.5 percent growth in International Adult Nutritionals in the first six months of 2024 was led by growth of Ensure and Glucerna product sales.
Previous wording
The 15.5 percent decrease in Diagnostic Products sales in the first three months of 2024, excluding the impact of foreign exchange, was primarily driven by lower demand for COVID-19 tests. In Rapid Diagnostics, sales decreased 38.7 percent in the first three months of 2024, excluding the effect of foreign exchange, due to lower demand for COVID-19 tests. In the first three months of 2024 and 2023, Rapid Diagnostics COVID-19 testing-related sales were $197 million and $704 million, respectively. In the first three months of 2024, Rapid Diagnostics sales increased 4.4 percent, excluding COVID-19 testing-related sales, and increased 5.6 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Current wording
The 9.0 percent decrease in Diagnostic Products sales in the first six months of 2024, excluding the impact of foreign exchange, was primarily driven by lower demand for COVID-19 tests. In Rapid Diagnostics, sales decreased 31.6 percent in the first six months of 2024, excluding the effect of foreign exchange, due to lower demand for COVID-19 tests. In the first six months of 2024 and 2023, Rapid Diagnostics COVID-19 testing-related sales were $294 million and $954 million, respectively. In the first six months of 2024, Rapid Diagnostics sales increased 1.7 percent, excluding COVID-19 testing-related sales, and increased 3.0 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Previous wording
In Core Laboratory Diagnostics, sales increased 5.9 percent in the first three months of 2024, excluding the effect of foreign exchange, due to the continued deployment of Abbott's Alinity® testing platform and higher 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. In the first three months of 2024 and 2023, Core Laboratory Diagnostics COVID-19 testing-related sales were $3 million and $6 million, respectively. In the first three months of 2024, Core Laboratory Diagnostics sales increased 2.2 percent, excluding COVID-19 testing-related sales, and increased 6.2 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Current wording
In Core Laboratory Diagnostics, sales increased 7.3 percent in the first six months of 2024, excluding the effect of foreign exchange, due to the continued deployment of Abbott's Alinity® testing platform and higher volume of routine diagnostic testing performed in hospitals and other laboratories. In the first six months of 2024 and 2023, Core Laboratory Diagnostics COVID-19 testing-related sales were $5 million and $11 million, respectively. In the first six months of 2024, Core Laboratory Diagnostics sales increased 2.6 percent, excluding COVID-19 testing-related sales, and increased 7.6 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Previous wording
The 11.7 percent decrease in Molecular Diagnostics sales in the first three months of 2024, excluding the effect of foreign exchange, was primarily driven bylower demand for laboratory-based molecular tests for COVID-19. In the first three months of 2024 and 2023, Molecular Diagnostics COVID-19 testing-related sales were $4 million and $20 million, respectively. In the first three months of 2024, Molecular Diagnostics sales decreased 1.1 percent, excluding COVID-19 testing-related sales, and decreased 0.8 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Current wording
The 10.5 percent decrease in Molecular Diagnostics sales in the first six months of 2024, excluding the effect of foreign exchange, was primarily driven by lower demand for laboratory-based molecular tests for COVID-19. In the first six months of 2024 and 2023, Molecular Diagnostics COVID-19 testing-related sales were $7 million and $28 million, respectively. In the first six months of 2024, Molecular Diagnostics sales decreased 3.8 percent, excluding COVID-19 testing-related sales, and decreased 3.2 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
Previous wording
Excluding the effect of foreign exchange, total Medical Devices sales increased 15.4 percent in the first three months of 2024, led by double-digit growth in Diabetes Care, Electrophysiology, Vascular, Structural Heart and Neuromodulation. Higher Diabetes Care sales were driven by continued growth of FreeStyle Libre®, Abbott’s continuous glucose monitoring system, in the U.S. and internationally. FreeStyle Libre sales totaled $1.5 billion in the first three months of 2024, which reflected a 23.3 percent increase, excluding the effect of foreign exchange, over the first three months of 2023 when FreeStyle Libre sales totaled $1.2 billion.
Current wording
Excluding the effect of foreign exchange, total Medical Devices sales increased 13.8 percent in the first six months of 2024, led by double-digit growth in Diabetes Care, Electrophysiology, Structural Heart and Neuromodulation. Higher Diabetes Care sales were driven by continued growth of FreeStyle Libre®, Abbott’s continuous glucose monitoring system, in the U.S. and internationally. FreeStyle Libre sales totaled $3.0 billion in the first six months of 2024, which reflected a 21.8 percent increase, excluding the effect of foreign exchange, over the first six months of 2023 when FreeStyle Libre sales totaled $2.5 billion.
Previous wording
In January 2024, Abbott announced that Tandem Diabetes Care, Inc.'s t:slim X2™ insulin pump is the first automated insulin delivery system in the U.S. to integrate with Abbott's FreeStyle Libre 2 Plus sensor for treating diabetes. In February 2024, Insulet's Omnipod® 5 Automated Insulin Delivery System received CE Mark approval to be offered as an integrated solution with Abbott's FreeStyle Libre 2 Plus sensor.
Current wording
In January 2024, Abbott announced that Tandem Diabetes Care, Inc.'s t:slim X2™ insulin pump is the first automated insulin delivery system in the U.S. to integrate with Abbott's FreeStyle Libre 2 Plus sensor for treating diabetes. In February 2024, Insulet's Omnipod® 5 Automated Insulin Delivery System received CE Mark approval to be offered as an integrated solution with Abbott's FreeStyle Libre 2 Plus sensor. In June, Abbott announced U.S. Food and Drug Administration (FDA) clearance for two new over-the-counter continuous glucose monitoring systems, Lingo TM and Libre Rio TM, which are based on Abbott's FreeStyle Libre continuous glucose monitoring technology.
Previous wording
During the first three months of 2024, procedure volumes continued to increase across the cardiovascular and neuromodulation businesses. In Structural Heart, the 13.0 percent increase in sales, excluding the effect of foreign exchange, primarily reflects continued growth of the MitraClip® and Navitor®products, as well as various structural intervention products. In Vascular, the 12.7 percent increase in sales, excluding the impact of foreign exchange, during the first three months of 2024 was primarily due to the acquisition of Cardiovascular Systems, Inc. (CSI) in April 2023 and double-digit growth in other endovascular sales.
Current wording
During the first six months of 2024, procedure volumes continued to increase across the cardiovascular and neuromodulation businesses. In Structural Heart, the 14.3 percent increase in sales, excluding the effect of foreign exchange, primarily reflects growth of the Navitor®, MitraClip®, TriClip®and Amulet® products. In Vascular, the 7.6 percent increase in sales, excluding the impact of foreign exchange, during the first six months of 2024 was primarily due to the acquisition of Cardiovascular Systems, Inc. (CSI) in April 2023 and growth in other endovascular sales.
Previous wording
In Electrophysiology, the 18.4 percent increase in sales, excluding the effect of foreign exchange, primarily reflects higher procedure volumes in the U.S., the Asia Pacific region and various European countries. In Neuromodulation, the 17.4 percent increase in sales, excluding the effect of foreign exchange, was driven by the Eterna TM rechargeable spinal cord stimulation system for the treatment of chronic pain.
Current wording
In Electrophysiology, the 17.5 percent increase in sales, excluding the effect of foreign exchange, primarily reflects higher procedure volumes and increased demand for catheters and cardiac mapping products. In Neuromodulation, the 12.5 percent increase in sales, excluding the effect of foreign exchange, was driven by the Eterna TM rechargeable spinal cord stimulation system for the treatment of chronic pain.
Previous wording
Abbott's gross profit margin percentage remained at 50.5 percent for the first quarter of 2024 compared to the first quarter of 2023 as the unfavorable effect of foreign exchange was offset by the favorable impacts of gross margin improvement initiatives, higher pricing in various businesses and product mix.
Current wording
The gross profit margin percentage was 51.1 percent for the second quarter of 2024 compared to 50.1 percent for the second quarter of 2023 and 50.8 percent for the first six months of 2024 compared to 50.3 percent for the first six months of 2023. The increase in the quarter and the first six months of 2024 reflects the favorable impacts of higher pricing in various businesses and gross margin improvement initiatives, partially offset by the unfavorable effect of foreign exchange.
Previous wording
Research and development (R&D) expenses increased $30 million, or 4.5 percent, in the first quarter of 2024 compared to the prior year. The increase in R&D expenses in the first quarter of 2024 was driven by higher spending on various projects.
Current wording
Research and development (R&D) expenses decreased $17 million, or 2.3 percent, in the second quarter of 2024 and increased $13 million, or 0.9 percent, in the first six months of 2024 compared to the prior year. The decrease in R&D expense in the second quarter of 2024 was primarily driven by lower 2024 charges for the impairment of in-process R&D (IPR&D) assets acquired in previous business combinations. The increase in R&D expense in the first six months of 2024 was primarily driven by higher spending on various projects, partially offset by lower 2024 IPR&D impairment charges.
Previous wording
Selling, general and administrative (SG&A) expenses increased $197 million, or 7.1 percent, in the first quarter of 2024 compared to the prior year as higher SG&A spending to drive growth across various businesses was partially offset by the favorable impact of foreign exchange.
Current wording
Selling, general and administrative expenses increased $196 million, or 7.1 percent, in the second quarter of 2024, and increased $393 million, or 7.1 percent, in the first six months of 2024 compared to the prior year. Higher selling and marketing spending to drive growth across various businesses was partially offset by the favorable impact of foreign exchange.
Previous wording
In 2024, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its nutritional business, including the discontinuation of its ZonePerfect® product line, and in its medical devices segment. In the first three months of 2024, Abbott recorded employee related severance and other charges of approximately $17 million, of which approximately $11 million was recorded in Cost of products sold, approximately $1 million was recorded in Research and development and approximately $5 million was recorded in Selling, general and administrative expenses. Payments related to these actions totaled $3 million in the first three months of 2024 and the remaining liabilities totaled $14 million at March 31, 2024. In addition, Abbott recognized asset impairment charges of approximately $30 million related to these restructuring plans.
Current wording
In 2024, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its diagnostic, medical devices and nutritional businesses, including the discontinuation of its ZonePerfect® product line. In the six months ended June 30, 2024, Abbott recorded employee related severance and other charges of $59 million, of which $38 million was recorded in Cost of products sold, $2 million was recorded in Research and development, and $19 million was recorded in Selling, general and administrative expenses. Payments related to these actions totaled $8 million in the first six months of 2024 and the remaining liabilities totaled $51 million at June 30, 2024. In addition, Abbott recognized asset impairment charges of $28 million related to these restructuring plans.
Previous wording
Other income, net totaled $111 million in the first quarter of 2024 and 2023. An increase in income associated with the non-service cost components of net pension and post-retirement medical benefit costs and a favorable change in the fair value of contingent consideration liabilities were offset by charges related to investment impairments.
Current wording
Other income, net decreased from $176 million of income in the second quarter of 2023 to $10 million of expense in the second quarter of 2024 and decreased from $287 million of income in the first six months of 2023 to $101 million of income in the first six months of 2024. The decreases reflect the recognition of a $143 million loss in the second quarter of 2024 on the sale of a non-core business related to the Established Pharmaceutical Products segment, as well as the 2023 impact of favorable changes in the fair value of contingent consideration liabilities that did not repeat in 2024. In addition, for the first six months of 2024, an increase in income associated with the non-service cost components of net pension and post-retirement medical benefit costs was offset by incremental charges related to investment impairments.
Previous wording
Interest expense, netincreased from$52 million in the first quarter of 2023 to$61 million in thefirst quarter of 2024 as interest income decreased from $101 million to $80 million due to a lower average cash balance in the first quarter of 2024 versus the first quarter of 2023. The decrease in interest income was partially offset by lower interest expense due to the repayment of approximately $2.25 billion of long-term debt in September and November of 2023.
Current wording
Interest expense, net decreased $3 million to $58 million in the second quarter of 2024 and increased $6 million to $119 million in the first six months of 2024. In the second quarter of 2024 and in the first six months of 2024, interest expense decreased due to the repayment of approximately $2.25 billion of long-term debt in September and November of 2023. In the first six months of 2024, the decrease in interest expense was more than offset by a reduction in interest income due to lower average cash balances versus the prior year, thereby resulting in an increase in Interest expense, net.
Previous wording
Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. In the first three months of 2024 and 2023, taxes on earnings include approximately $25 million and $3 million, respectively, in excess tax benefits associated with share-based compensation. In the first three months of 2024 and 2023, taxes on earnings also include approximately $10 million and $22 million, respectively, of tax expense as the result of the resolution of various tax positions related to prior years.
Current wording
Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. In the first six months of 2024 and 2023, taxes on earnings include approximately $29 million and $9 million, respectively, in excess tax benefits associated with share-based compensation. In the first six months of 2024 and 2023, taxes on earnings also include approximately $35 million and $62 million, respectively, of tax expense as the result of the resolution of various tax positions related to prior years.
Previous wording
Tax authorities in various jurisdictions regularly review Abbott’s income tax filings. Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease approximately $82 million to $1.34 billion, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.
Current wording
Tax authorities in various jurisdictions regularly review Abbott’s income tax filings. Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease approximately $90 million to $1.34 billion, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.
Previous wording
In September 2023, Abbott received a Statutory Notice of Deficiency (SNOD) from the IRS for the 2019 Federal tax year in the amount of $417 million. The primary adjustments proposed in the SNOD relate to the reallocation of income between Abbott’s U.S. entities and its foreign affiliates. Abbott believes that the income reallocation adjustments proposed in the SNOD are without merit, in part because certain adjustments contradict methods that were agreed to with the IRS in prior audit periods. The SNOD also contains other proposed adjustments that Abbott believes are erroneous and unsupported. Abbott filed a petition with the U.S. Tax Court contesting the SNOD in December 2023.
Current wording
In September 2023, Abbott received a Statutory Notice of Deficiency (SNOD) from the U.S. Internal Revenue Service (IRS) for the 2019 Federal tax year in the amount of $417 million. The primary adjustments proposed in the SNOD relate to the reallocation of income between Abbott’s U.S. entities and its foreign affiliates. Abbott believes that the income reallocation adjustments proposed in the SNOD are without merit, in part because certain adjustments contradict methods that were agreed to with the IRS in prior audit periods. The SNOD also contains other proposed adjustments that Abbott believes are erroneous and unsupported. Abbott filed a petition with the U.S. Tax Court contesting the SNOD in December 2023.
Previous wording
Abbott reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities. Abbott continues to believe that its reserves for uncertain tax positions are appropriate.
Current wording
Abbott intends to vigorously defend its filing positions through ongoing discussions with the IRS, the IRS independent appeals process and/or through litigation as necessary. Abbott reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities. Abbott continues to believe that its reserves for uncertain tax positions are appropriate.
Previous wording
The decrease in cash and cash equivalents from $6.9 billion at December 31, 2023 to $6.3 billion at March 31, 2024 primarily reflects the payment of dividends and capital expenditures, partially offset by the cash generated from operations in the first three months of 2024. Working capital was $8.4 billion at March 31, 2024 and $8.8 billion at December 31, 2023. The decrease in working capital in 2024 primarily reflects a decrease in cash and cash equivalents, as well as an increase in the current portion of long-term debt, partially offset by decreases in accrued salaries and accounts payable.
Current wording
The increase in cash and cash equivalents from $6.9 billion at December 31, 2023 to $7.0 billion at June 30, 2024 primarily reflects the cash generated from operations and an increase in Abbott's yen-denominated loan, partially offset by the payment of dividends and capital expenditures in the first six months of 2024. Working capital was $9.4 billion at June 30, 2024 and $8.8 billion at December 31, 2023. The increase in working capital in 2024 primarily reflects an increase in cash and cash equivalents, accounts receivable, and inventory, as well as decreases in accrued salaries and other accrued liabilities, partially offset by an increase in the current portion of long-term debt and income taxes payable.
Previous wording
In the Condensed Consolidated Statement of Cash Flows, Net cash from operating activities for the first three months of 2024 totaled approximately $1.0 billion, which reflects a decrease of $118 million from the prior year. The decrease reflects lower operating earnings and an increase in trade receivables in 2024. In the first three months of 2024, Net cash from operating activities includes $280 million of pension contributions and the payment of cash taxes of approximately $225 million. In the first three months of 2023, Net cash from operating activities includes $282 million of pension contributions and the payment of cash taxes of approximately $122 million.
Current wording
In the Condensed Consolidated Statement of Cash Flows, Net cash from operating activities for the first six months of 2024 totaled approximately $3.0 billion, an increase of $0.6 billion from the prior year, due to higher operating segment earnings and the timing of cash taxes paid. In the first six months of 2024, Net cash from operating activities includes $289 million of pension contributions and the payment of cash taxes of approximately $747 million. Net cash from operating activities in 2023 includes $290 million of pension contributions and the payment of cash taxes of approximately $837 million.
Previous wording
In the first quarter of 2024, Abbott declared a quarterly dividend of $0.55 per share on its common shares, which represents an increase of 7.8 percent over the $0.51 per share dividend declared in the first quarter of 2023.
Current wording
In each of the first two quarters of 2024, Abbott declared a quarterly dividend of $0.55 per share on its common shares, which represents an increase of 7.8 percent over the $0.51 per share dividend declared in each of the first two quarters of 2023.
Previous wording
On September 22, 2023, Abbott completed the acquisition of Bigfoot Biomedical, Inc. (Bigfoot), which will further Abbott's efforts to develop connected solutions for making diabetes management more personal and precise. The purchase price, the preliminary allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's condensed consolidated financial statements.
Current wording
On September 22, 2023, Abbott completed the acquisition of Bigfoot Biomedical, Inc. (Bigfoot), which furthers Abbott's efforts to develop connected solutions for making diabetes management more personal and precise. The purchase price, the final allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's condensed consolidated financial statements.
Previous wording
On April 27, 2023, Abbott completed the acquisition of CSI for $20 per common share, which equated to a purchase price of $851 million. The transaction was funded with cash on hand and accounted for as a business combination. CSI's atherectomy system, which is used in treating peripheral and coronary artery disease, adds complementary technologies to Abbott's portfolio of vascular device offerings.
Current wording
On April 27, 2023, Abbott completed the acquisition of Cardiovascular Systems, Inc. (CSI) for$20 per common share, which equated to a purchase price of$851 million. The transaction was funded with cash on hand and accounted for as a business combination. CSI's atherectomy system, which is used in treating peripheral and coronary artery disease, adds complementary technologies to Abbott's portfolio of vascular device offerings.
Previous wording
The final allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets totaling $305 million; non-deductible in-process research and development of $15 million, which will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation; non-deductible goodwill of $369 million; net deferred tax assets of $46 million and other net assets of $116 million. The goodwill is identifiable to the Medical Devices reportable segment and is attributable to expected synergies from combining operations, as well as intangible assets that do not qualify for separate recognition. Revenues and earnings of CSI included in Abbott's condensed consolidated financial statements since the acquisition date are not material to Abbott's consolidated revenue and earnings.
Current wording
The final allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets totaling $305 million; a non-deductible in-process research and development asset of $15 million, which will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation; non-deductible goodwill of $369 million; net deferred tax assets of $46 million and other net assets of $116 million. The goodwill is identifiable to the Medical Devices reportable segment and is attributable to expected synergies from combining operations, as well as intangible assets that do not qualify for separate recognition. Revenues and earnings of CSI included in Abbott's condensed consolidated financial statements since the acquisition date are not material to Abbott's consolidated revenue and earnings.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The 6.3 percent increase in total net sales during the first six months of 2024, excluding the impact of foreign exchange, reflected sales growth in the Medical Devices, Nutritional Products, and Established Pharmaceutical Products segments, partially offset by a decrease in demand for Abbott’s rapid diagnostic tests to detect COVID-19. Abbott’s COVID-19 testing-related sales totaled $306 million during the first six months of 2024 and $993 million during the first six months of 2023. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales increased 7.0 percent. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased 10.3 percent. Abbott’s net sales were unfavorably impacted by changes in foreign exchange rates in the first six months as the relatively stronger U.S. dollar decreased total international sales by 5.3 percent and total sales by 3.2 percent.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Abbott’s 2017 and 2018 Federal tax years are also currently under examination by the IRS with respect to income reallocation issues similar to those included in the 2019 Federal tax year. Abbott intends to vigorously defend its filing positions through ongoing discussions with the IRS, the IRS independent appeals process and/or through litigation as necessary.