Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ABBOTT LABORATORIES | a13-2169_18k.htm |
Exhibit 99.1
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Financial Information
On January 1, 2013, Abbott Laboratories (“Abbott”) completed the previously announced distribution of 100% of the outstanding common stock of AbbVie Inc. (“AbbVie”) to Abbott’s shareholders (the “Distribution”).
The following unaudited pro forma consolidated statements of earnings of Abbott for the nine months ended September 30, 2012 and for each of the years ended December 31, 2011, 2010, and 2009 are presented as if the Distribution had occurred as of January 1, 2009. The following unaudited pro forma consolidated balance sheet of Abbott as of September 30, 2012 assumes that the Distribution occurred on September 30, 2012.
The statements are presented based on information currently available, are intended for informational purposes only, and do not purport to represent what Abbott’s financial position and results of operations actually would have been had the Distribution occurred on the dates indicated, or to project Abbott’s financial performance for any future period. Beginning in the first quarter of 2013, AbbVie’s historical financial results for periods prior to the Distribution will be reflected in Abbott’s consolidated financial statements as discontinued operations.
The unaudited pro forma consolidated financial statements and the accompanying notes should be read in conjunction with (i) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Abbott’s Form 10-K for the year ended December 31, 2011 and (ii) the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Abbott’s Form 10-Q for the nine months ended September 30, 2012.
The Historical column in the Unaudited Pro Forma Consolidated Statements of Earnings and in the Unaudited Pro Forma Consolidated Balance Sheet reflects Abbott’s historical financial statements for the periods presented and does not reflect any adjustments related to the Distribution and related events.
The information in the AbbVie Separation column in the Unaudited Pro Forma Consolidated Statements of Earnings was derived from the annual and interim combined financial statements included in AbbVie’s Form 10 and was adjusted to exclude previously allocated corporate overhead costs and certain costs associated with transition services that will be provided by Abbott to AbbVie. The AbbVie Separation column also includes an allocation of interest assuming a uniform ratio of consolidated debt to equity for all of Abbott’s historical operations in accordance with Accounting Standards Codification 205-20-45. The AbbVie Separation column excludes
the separation costs previously included in AbbVie’s combined financial statements that are directly related to the separation of AbbVie from Abbott. The information in the AbbVie Separation column in the Unaudited Pro Forma Consolidated Balance Sheet was derived from the pro forma condensed combined balance sheet included in AbbVie’s Form 10.
The Other column in the Unaudited Pro Forma Consolidated Statements reflects additional pro forma adjustments which are further described in the accompanying notes.
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
Nine Months Ended September 30, 2012
(dollars and shares in millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
|
Abbott |
| ||||
|
|
|
|
|
AbbVie |
|
|
|
|
|
Continuing |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
Operations |
| ||||
|
Net Sales |
|
$ |
29,037 |
|
$ |
(13,174 |
) |
$ |
|
|
|
|
$ |
15,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of products sold |
|
11,060 |
|
(3,239 |
) |
(4 |
) |
(a) |
|
7,817 |
| ||||
|
Research & development |
|
3,181 |
|
(2,093 |
) |
(4 |
) |
(a) |
|
1,084 |
| ||||
|
Acquired in-process and collaborations research and development |
|
260 |
|
(260 |
) |
|
|
|
|
— |
| ||||
|
Selling, general and administrative |
|
8,867 |
|
(3,096 |
) |
(194 |
) |
(a) |
|
5,577 |
| ||||
|
Total Operating Cost and Expenses |
|
23,368 |
|
(8,688 |
) |
(202 |
) |
|
|
14,478 |
| ||||
|
Operating Earnings |
|
5,669 |
|
(4,486 |
) |
202 |
|
|
|
1,385 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
406 |
|
(143 |
) |
(100 |
) |
(a)(b) |
|
163 |
| ||||
|
Interest (income) |
|
(56 |
) |
— |
|
|
|
|
|
(56 |
) | ||||
|
Net foreign exchange loss (gain) |
|
4 |
|
(27 |
) |
|
|
|
|
(23 |
) | ||||
|
Other (income) expense, net |
|
(74 |
) |
53 |
|
|
|
|
|
(21 |
) | ||||
|
Earnings Before Taxes |
|
5,389 |
|
(4,369 |
) |
302 |
|
|
|
1,322 |
| ||||
|
Taxes on Earnings |
|
479 |
|
(262 |
) |
32 |
|
(a)(b) |
|
249 |
| ||||
|
Net Earnings |
|
$ |
4,910 |
|
$ |
(4,107 |
) |
$ |
270 |
|
|
|
$ |
1,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic Earnings Per Share from Continuing Operations |
|
$ |
3.09 |
|
|
|
|
|
|
|
$ |
0.68 |
| ||
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|
|
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|
|
|
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|
|
|
|
| ||||
|
Diluted Earnings Per Share from Continuing Operations |
|
$ |
3.06 |
|
|
|
|
|
|
|
$ |
0.67 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
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Weighted Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
1,574 |
|
|
|
|
|
|
|
1,574 |
| ||||
|
Diluted |
|
1,591 |
|
|
|
|
|
|
|
1,591 |
| ||||
See accompanying notes.
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
Year Ended December 31, 2011
(dollars and shares in millions except per share data)
|
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|
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|
|
|
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Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
|
Abbott |
| ||||
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|
|
|
|
AbbVie |
|
|
|
|
|
Continuing |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
Operations |
| ||||
|
Net Sales |
|
$ |
38,851 |
|
$ |
(17,444 |
) |
$ |
|
|
|
|
$ |
21,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of products sold |
|
15,541 |
|
(4,639 |
) |
|
|
|
|
10,902 |
| ||||
|
Research & development |
|
4,129 |
|
(2,618 |
) |
|
|
|
|
1,511 |
| ||||
|
Acquired in-process and collaborations research and development |
|
672 |
|
(672 |
) |
|
|
|
|
— |
| ||||
|
Selling, general and administrative |
|
12,757 |
|
(5,393 |
) |
|
|
|
|
7,364 |
| ||||
|
Total Operating Cost and Expenses |
|
33,099 |
|
(13,322 |
) |
|
|
|
|
19,777 |
| ||||
|
Operating Earnings |
|
5,752 |
|
(4,122 |
) |
|
|
|
|
1,630 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
530 |
|
(158 |
) |
(108 |
) |
(b) |
|
264 |
| ||||
|
Interest (income) |
|
(85 |
) |
— |
|
|
|
|
|
(85 |
) | ||||
|
Net foreign exchange loss (gain) |
|
(50 |
) |
30 |
|
|
|
|
|
(20 |
) | ||||
|
Other (income) expense, net |
|
159 |
|
18 |
|
|
|
|
|
177 |
| ||||
|
Earnings Before Taxes |
|
5,198 |
|
(4,012 |
) |
108 |
|
|
|
1,294 |
| ||||
|
Taxes on Earnings |
|
470 |
|
(251 |
) |
41 |
|
(b) |
|
260 |
| ||||
|
Net Earnings |
|
$ |
4,728 |
|
$ |
(3,761 |
) |
$ |
67 |
|
|
|
$ |
1,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic Earnings Per Share from Continuing Operations |
|
$ |
3.03 |
|
|
|
|
|
|
|
$ |
0.66 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted Earnings Per Share from Continuing Operations |
|
$ |
3.01 |
|
|
|
|
|
|
|
$ |
0.66 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
1,558 |
|
|
|
|
|
|
|
1,558 |
| ||||
|
Diluted |
|
1,567 |
|
|
|
|
|
|
|
1,567 |
| ||||
See accompanying notes.
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
Year Ended December 31, 2010
(dollars and shares in millions except per share data)
|
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|
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|
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
|
Abbott |
| ||||
|
|
|
|
|
AbbVie |
|
|
|
|
|
Continuing |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
Operations |
| ||||
|
Net Sales |
|
$ |
35,167 |
|
$ |
(15,638 |
) |
$ |
|
|
|
|
$ |
19,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of products sold |
|
14,665 |
|
(4,293 |
) |
|
|
|
|
10,372 |
| ||||
|
Research & development |
|
3,725 |
|
(2,495 |
) |
|
|
|
|
1,230 |
| ||||
|
Acquired in-process and collaborations research and development |
|
313 |
|
(313 |
) |
|
|
|
|
— |
| ||||
|
Selling, general and administrative |
|
10,376 |
|
(3,317 |
) |
|
|
|
|
7,059 |
| ||||
|
Total Operating Cost and Expenses |
|
29,079 |
|
(10,418 |
) |
|
|
|
|
18,661 |
| ||||
|
Operating Earnings |
|
6,088 |
|
(5,220 |
) |
|
|
|
|
868 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
553 |
|
(204 |
) |
(64 |
) |
(b) |
|
285 |
| ||||
|
Interest (income) |
|
(105 |
) |
— |
|
|
|
|
|
(105 |
) | ||||
|
Net foreign exchange loss (gain) |
|
(11 |
) |
30 |
|
|
|
|
|
19 |
| ||||
|
Other (income) expense, net |
|
(62 |
) |
89 |
|
|
|
|
|
27 |
| ||||
|
Earnings Before Taxes |
|
5,713 |
|
(5,135 |
) |
64 |
|
|
|
642 |
| ||||
|
Taxes on Earnings |
|
1,087 |
|
(662 |
) |
24 |
|
(b) |
|
449 |
| ||||
|
Net Earnings |
|
$ |
4,626 |
|
$ |
(4,473 |
) |
$ |
40 |
|
|
|
$ |
193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic Earnings Per Share from Continuing Operations |
|
$ |
2.98 |
|
|
|
|
|
|
|
$ |
0.12 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted Earnings Per Share from Continuing Operations |
|
$ |
2.96 |
|
|
|
|
|
|
|
$ |
0.12 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
1,546 |
|
|
|
|
|
|
|
1,546 |
| ||||
|
Diluted |
|
1,556 |
|
|
|
|
|
|
|
1,556 |
| ||||
See accompanying notes.
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
Year Ended December 31, 2009
(dollars and shares in millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
|
Abbott |
| ||||
|
|
|
|
|
AbbVie |
|
|
|
|
|
Continuing |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
Operations |
| ||||
|
Net Sales |
|
$ |
30,765 |
|
$ |
(14,214 |
) |
$ |
|
|
|
|
$ |
16,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of products sold |
|
13,209 |
|
(4,056 |
) |
|
|
|
|
9,153 |
| ||||
|
Research & development |
|
2,744 |
|
(1,707 |
) |
|
|
|
|
1,037 |
| ||||
|
Acquired in-process and collaborations research and development |
|
170 |
|
(170 |
) |
|
|
|
|
— |
| ||||
|
Selling, general and administrative |
|
8,406 |
|
(2,885 |
) |
|
|
|
|
5,521 |
| ||||
|
Total Operating Cost and Expenses |
|
24,529 |
|
(8,818 |
) |
|
|
|
|
15,711 |
| ||||
|
Operating Earnings |
|
6,236 |
|
(5,396 |
) |
|
|
|
|
840 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
520 |
|
(149 |
) |
(139 |
) |
(b) |
|
232 |
| ||||
|
Interest (income) |
|
(138 |
) |
— |
|
|
|
|
|
(138 |
) | ||||
|
Net foreign exchange loss (gain) |
|
35 |
|
(19 |
) |
|
|
|
|
16 |
| ||||
|
Other (income) expense, net |
|
(1,375 |
) |
1,037 |
|
|
|
|
|
(338 |
) | ||||
|
Earnings Before Taxes |
|
7,194 |
|
(6,265 |
) |
139 |
|
|
|
1,068 |
| ||||
|
Taxes on Earnings |
|
1,448 |
|
(1,336 |
) |
52 |
|
(b) |
|
164 |
| ||||
|
Net Earnings |
|
$ |
5,746 |
|
$ |
(4,929 |
) |
$ |
87 |
|
|
|
$ |
904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic Earnings Per Share from Continuing Operations |
|
$ |
3.71 |
|
|
|
|
|
|
|
$ |
0.58 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted Earnings Per Share from Continuing Operations |
|
$ |
3.69 |
|
|
|
|
|
|
|
$ |
0.58 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
1,547 |
|
|
|
|
|
|
|
1,547 |
| ||||
|
Diluted |
|
1,555 |
|
|
|
|
|
|
|
1,555 |
| ||||
See accompanying notes.
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
As of September 30, 2012
(dollars in millions)
|
|
|
|
|
AbbVie |
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
Abbott |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
7,997 |
|
$ |
(5,376 |
) |
$ |
7,160 |
|
(c) |
|
$ |
9,781 |
|
|
Investments, primarily time deposits and certificates of deposit |
|
3,507 |
|
(1,824 |
) |
|
|
|
|
1,683 |
| ||||
|
Trade receivables less allowances |
|
6,949 |
|
(3,098 |
) |
|
|
|
|
3,851 |
| ||||
|
Inventories: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Finished products |
|
2,500 |
|
(591 |
) |
|
|
|
|
1,909 |
| ||||
|
Work in process |
|
531 |
|
(181 |
) |
|
|
|
|
350 |
| ||||
|
Materials |
|
783 |
|
(187 |
) |
|
|
|
|
596 |
| ||||
|
Total inventories |
|
3,814 |
|
(959 |
) |
|
|
|
|
2,855 |
| ||||
|
Prepaid expenses, deferred income taxes and other receivables |
|
4,997 |
|
(2,289 |
) |
|
|
|
|
2,708 |
| ||||
|
Total Current Assets |
|
27,264 |
|
(13,546 |
) |
7,160 |
|
|
|
20,878 |
| ||||
|
Investments |
|
380 |
|
(203 |
) |
|
|
|
|
177 |
| ||||
|
Property and Equipment, at Cost |
|
18,630 |
|
(6,342 |
) |
|
|
|
|
12,288 |
| ||||
|
Less: accumulated depreciation and amortization |
|
10,669 |
|
(4,169 |
) |
|
|
|
|
6,500 |
| ||||
|
Net Property and Equipment |
|
7,961 |
|
(2,173 |
) |
|
|
|
|
5,788 |
| ||||
|
Intangible Assets, net of amortization |
|
8,960 |
|
(2,431 |
) |
|
|
|
|
6,529 |
| ||||
|
Goodwill |
|
15,709 |
|
(6,092 |
) |
|
|
|
|
9,617 |
| ||||
|
Deferred Income Taxes and Other Assets |
|
2,984 |
|
(1,503 |
) |
(488 |
) |
(c) |
|
993 |
| ||||
|
|
|
$ |
63,258 |
|
$ |
(25,948 |
) |
$ |
6,672 |
|
|
|
$ |
43,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Short-term borrowings |
|
$ |
3,206 |
|
$ |
(1,000 |
) |
$ |
1,000 |
|
(c) |
|
$ |
3,206 |
|
|
Trade accounts payable |
|
1,605 |
|
(424 |
) |
|
|
|
|
1,181 |
| ||||
|
Salaries, wages and commissions |
|
1,396 |
|
(520 |
) |
|
|
|
|
876 |
| ||||
|
Other accrued liabilities |
|
7,542 |
|
(4,424 |
) |
|
|
|
|
3,118 |
| ||||
|
Dividends payable |
|
808 |
|
— |
|
|
|
|
|
808 |
| ||||
|
Income taxes payable |
|
709 |
|
— |
|
|
|
|
|
709 |
| ||||
|
Current portion of long-term debt |
|
1,019 |
|
— |
|
|
|
|
|
1,019 |
| ||||
|
Total Current Liabilities |
|
16,285 |
|
(6,368 |
) |
1,000 |
|
|
|
10,917 |
| ||||
|
Long-term Debt |
|
12,055 |
|
(14,700 |
) |
7,000 |
|
(c) |
|
4,355 |
| ||||
|
Post-employment Obligations, Deferred Income Taxes and Other Long-term Liabilities |
|
7,813 |
|
(2,650 |
) |
|
|
|
|
5,163 |
| ||||
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Shareholders’ Investment |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Preferred shares, one dollar par value |
|
— |
|
|
|
|
|
|
|
|
| ||||
|
Common shares, without par value |
|
11,419 |
|
— |
|
|
|
|
|
11,419 |
| ||||
|
Common shares held in treasury, at cost — Shares 89,872,551 |
|
(4,975 |
) |
— |
|
|
|
|
|
(4,975 |
) | ||||
|
Earnings employed in the business |
|
23,327 |
|
(3,267 |
) |
(1,328 |
) |
(c) |
|
18,732 |
| ||||
|
Accumulated other comprehensive income (loss) |
|
(2,756 |
) |
1,037 |
|
|
|
|
|
(1,719 |
) | ||||
|
Total Abbott Shareholders’ Investment |
|
27,015 |
|
(2,230 |
) |
(1,328 |
) |
|
|
23,457 |
| ||||
|
Noncontrolling Interests in Subsidiaries |
|
90 |
|
— |
|
|
|
|
|
90 |
| ||||
|
Total Shareholders’ Investment |
|
27,105 |
|
(2,230 |
) |
(1,328 |
) |
|
|
23,547 |
| ||||
|
|
|
$ |
63,258 |
|
$ |
(25,948 |
) |
$ |
6,672 |
|
|
|
$ |
43,982 |
|
See accompanying notes.
Abbott Laboratories and Subsidiaries
Unaudited Pro Forma Consolidated Financial Information
Note 1. Other Pro Forma Adjustments
a) Reflects the removal of $222 million of separation costs incurred during 2012, and related tax effects, that are directly related to the separation of AbbVie from Abbott.
b) Reflects the additional reduction in interest expense, and related tax effects, as a result of Abbott’s tender for $7.7 billion of its long-term debt in the fourth quarter of 2012. The reduction in interest expense reflects the actual debt that is outstanding after the completion of the tender.
c) Reflects 1) the issuance of $14.7 billion of long-term debt and $1 billion of short-term borrowings by AbbVie, less debt issuance costs of $67 million and 2) the redemption of $7.7 billion of long-term debt by Abbott, along with the unwinding of interest rate swaps related to this debt.