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Notes to Consolidated Financial Statements

Note 6 — Segment and Geographic Area Information

Abbott’s principal business is the discovery, development, manufacture and sale of a broad line of health care products. Abbott’s products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians’ offices and government agencies throughout the world. Effective January 1, 2011, Abbott’s segments were reorganized to reflect the shift of international branded generic pharmaceutical products to a newly formed division, Established Pharmaceuticals, and the combination of the domestic and international proprietary pharmaceuticals businesses into one global division. The segment information below has been adjusted to reflect the reorganizations. Abbott’s reportable segments are as follows:

Proprietary Pharmaceutical Products — Worldwide sales of a broad line of proprietary pharmaceutical products.

Established Pharmaceutical Products — International sales of a broad line of branded generic pharmaceutical products.

Nutritional Products — Worldwide sales of a broad line of adult and pediatric nutritional products.

Diagnostic Products — Worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites. For segment reporting purposes, the Core Laboratories Diagnostics, Molecular Diagnostics, Point of Care and Ibis diagnostic divisions are aggregated and reported as the Diagnostic Products segment.

Vascular Products — Worldwide sales of coronary, endovascular, structural heart, vessel closure and other medical device products.

Non-reportable segments include the Diabetes Care and Medical Optics segments.

Abbott’s underlying accounting records are maintained on a legal entity basis for government and public reporting requirements. Segment disclosures are on a performance basis consistent with internal management reporting. Intersegment transfers of inventory are recorded at standard cost and are not a measure of segment operating earnings. The cost of some corporate functions and the cost of certain employee benefits are charged to segments at predetermined rates that approximate cost. Remaining costs, if any, are not allocated to segments. For acquisitions prior to 2006, substantially all intangible assets and related amortization are not allocated to segments. In addition, no intangible assets or related amortization are allocated to the Established Pharmaceutical Products segment. The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.

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(a) Net sales and operating earnings were favorably affected by the relatively weaker U.S. dollar in 2011 and 2010 and for 2009 were unfavorably affected by the relatively stronger U.S. dollar. (b) Additions to long-term assets in 2010 for the Established Pharmaceutical Products segment include goodwill of $2,797.

(dollars in millions)	2011	2010	2009
Total Reportable Segment Operating Earnings	$10,999	$9,776	$8,316
Corporate functions and benefit plans costs	(529)	(558)	(354)
Non-reportable segments	276	139	209
Net interest expense	(445)	(448)	(382)
Acquired in-process and collaborations research and development	(673)	(313)	(170)
Share-based compensation	(383)	(387)	(366)
Other, net (c)	(4,046)	(2,496)	(59)
Consolidated Earnings Before Taxes	$5,199	$5,713	$7,194
(c) Other, net, for 2011 includes a charge of $1,509 related to a previously disclosed government investigation. Other, net, for 2011 and 2010 includes charges of $402 and $881, respectively, for integration, restructuring and other costs associated with the acquisitions of Solvay and Piramal and, in 2010, $189 for the impairment of the intangible asset related to sibutramine. Other, net, for 2009, includes the derecognition of a contingent liability of $797 established in connection with the conclusion of the TAP joint venture and a $287 gain from a patent litigation settlement.

(dollars in millions)	2011	2010	2009
Total Reportable Segment Assets	$29,902	$30,247	$23,674
Cash, investments and restricted funds	8,476	7,626	11,065
Current deferred income taxes	2,701	3,076	2,364
Non-reportable segments	4,173	5,385	5,371
All other, net, primarily goodwill and intangible assets not allocated to reportable segments	15,025	14,240	10,108
Total Assets	$60,277	$60,574	$52,582

(dollars in millions)	Net Sales to External Customers (d)			Long-term Assets
	2011	2010	2009	2011	2010	2009
United States	$16,014	$15,194	$14,453	$15,867	$16,769	$14,886
Japan	2,342	2,025	1,590	1,225	1,172	1,161
Germany	1,759	1,846	1,481	5,909	5,950	6,914
The Netherlands	2,108	2,001	1,801	462	312	365
Italy	1,189	1,144	1,172	229	242	274
Canada	1,098	1,036	902	237	224	166
France	1,297	1,216	959	214	87	106
Spain	1,063	1,066	970	293	291	342
United Kingdom	971	888	779	1,273	1,272	1,095
All Other Countries	11,010	8,751	6,658	10,799	11,937	3,959
Consolidated	$38,851	$35,167	$30,765	$36,508	$38,256	$29,268
(d) Sales by country are based on the country that sold the product.