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SECURITIES AND EXCHANGE COMMISSION
FORM 10-K
WASHINGTON, D. C. 20549
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(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993. COMMISSION FILE NUMBER 1-2189
[LOGO] ABBOTT LABORATORIES
AN ILLINOIS CORPORATION 36-0698440
(I.R.S. employer identification
number)
ONE ABBOTT PARK ROAD (708) 937-6100
ABBOTT PARK, ILLINOIS 60064-3500 (telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
ON WHICH REGISTERED
TITLE OF EACH CLASS
Common Shares, Without Par Value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS
FOR THE PAST 90 DAYS.
YES __X__ NO _____
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN AND WILL NOT BE CONTAINED, TO THE BEST
OF THE REGISTRANT'S KNOWLEDGE, IN THE PROXY STATEMENT INCORPORATED BY REFERENCE
IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [ ]
THE AGGREGATE MARKET VALUE OF THE 748,888,598 SHARES OF VOTING STOCK HELD BY
NONAFFILIATES OF THE REGISTRANT, COMPUTED BY USING THE CLOSING PRICE AS REPORTED
ON THE CONSOLIDATED TRANSACTION REPORTING SYSTEM FOR ABBOTT LABORATORIES COMMON
SHARES WITHOUT PAR VALUE ON JANUARY 31, 1994, WAS APPROXIMATELY $22,092,213,641.
NUMBER OF COMMON SHARES OUTSTANDING AS OF JANUARY 31, 1994: 819,811,254.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE ABBOTT LABORATORIES ANNUAL REPORT FOR THE YEAR ENDED DECEMBER
31, 1993 ARE INCORPORATED BY REFERENCE INTO PARTS I, II, AND IV.
PORTIONS OF THE 1994 ABBOTT LABORATORIES PROXY STATEMENT ARE INCORPORATED BY
REFERENCE INTO PART III.
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Abbott Laboratories is an Illinois corporation, incorporated in 1900. The
Company's* principal business is the discovery, development, manufacture, and
sale of a broad and diversified line of health care products and services.
FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS,
GEOGRAPHIC AREAS, AND CLASSES OF SIMILAR PRODUCTS
Incorporated herein by reference is the footnote entitled "Industry Segment
and Geographic Area Information" of the Consolidated Financial Statements in the
Abbott Laboratories Annual Report for the year ended December 31, 1993 ("1993
Annual Report"), filed as an exhibit to this report. Also incorporated herein by
reference is the text and table of sales by class of similar products included
in the section of the 1993 Annual Report captioned "Financial Review."
NARRATIVE DESCRIPTION OF BUSINESS
PHARMACEUTICAL AND NUTRITIONAL PRODUCTS
Included in this segment is a broad line of adult and pediatric
pharmaceuticals and nutritionals. These products are sold primarily on the
prescription or recommendation of physicians or other health care professionals.
The segment also includes agricultural and chemical products, bulk
pharmaceuticals, and consumer products.
Principal pharmaceutical and nutritional products include the
anti-infectives clarithromycin, sold in the United States under the trademark
Biaxin-R- and outside the United States primarily under the trademark Klacid-R-
and tosufloxacin, sold in Japan under the trademark Tosuxacin-TM-; various forms
of the antibiotic erythromycin, sold primarily as PCE-R- or polymer-coated
erythromycin, Erythrocin-R-, and E.E.S.-R-; agents for the treatment of
epilepsy, including Depakote-R-; a broad line of cardiovascular products,
including Loftyl-R-, a vasoactive agent sold outside the United States;
Hytrin-R-, used as an anti-hypertensive and for the treatment of benign
prostatic hyperplasia; Abbokinase-R-, a thrombolytic drug; Survanta-R-, a bovine
derived lung surfactant; various forms of prepared infant formula, including
Similac-R-, Isomil-R-, and Alimentum-R-; and other medical and pediatric
nutritionals, including Ensure-R-, Ensure Plus-R-, Jevity-R-, Glucerna-R-,
Advera-TM-, PediaSure-R-, Pedialyte-R- and Gain-R-. Consumer products include
the dandruff shampoo Selsun Blue-R-; Murine-R- eye care and ear care products;
Tronolane-R- hemorrhoid medication; and Faultless-R- rubber sundry products.
Agricultural and chemical products include plant growth regulators, including
ProGibb-R-; herbicides; larvicides, including Vectobac-R-; and biologically
derived insecticides, including DiPel-R- and XenTari-R-.
Pharmaceutical and nutritional products are generally sold directly to
retailers, wholesalers, health care facilities, and government agencies. In most
cases, they are distributed from Company-owned distribution centers or public
warehouses. Certain products are co-marketed with other companies. In certain
overseas countries, some of these products are marketed and distributed through
distributors. Primary marketing efforts for pharmaceutical and nutritional
products are directed toward securing the prescription or recommendation of the
Company's brand of products by physicians or other health care professionals.
Managed care purchasers, for example health maintenance organizations (HMOs) and
pharmacy benefit managers, are becoming increasingly important customers.
Competition is generally from other broad line and specialized health care
manufacturers. A significant aspect of competition is the search for
technological innovations. The
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* As used throughout the text of this Report, the term "Company" refers to
Abbott Laboratories, an Illinois corporation, or Abbott Laboratories and its
consolidated subsidiaries, as the context requires.
1
introduction of new products by competitors and changes in medical practices and
procedures can result in product obsolescence. In addition, the substitution of
generic drugs for the brand prescribed has increased competitive pressures on
pharmaceutical products.
Consumer products are promoted directly to the public by consumer
advertising. These products are generally sold directly to retailers and
wholesalers. Competitive products are sold by other diversified consumer and
health care companies. Competitive factors include consumer advertising,
scientific innovation, price, and availability of generic product forms.
Agricultural and chemical products are generally sold to agricultural
distributors and pharmaceutical companies. Competition is primarily from large
chemical and agricultural companies and companies selling specialized
agricultural products. Competition is based on numerous factors depending on the
market served. Important competitive factors include product performance for
specialized industrial and agricultural uses, price, and technological
advantages.
The Company is the leading worldwide producer of the antibiotic
erythromycin. Similac-R- is the leading infant formula product in the United
States.
Under an agreement between the Company and Takeda Chemical Industries, Ltd.
of Japan (Takeda), TAP Pharmaceuticals Inc. (TAP), owned 50 percent by the
Company and 50 percent by Takeda, develops and markets in the United States
products based on Takeda research. TAP markets Lupron-R-, an LH-RH analog, and
Lupron Depot-R-, a sustained release form of Lupron-R-, in the United States.
These agents are used for the treatment of advanced prostatic cancer,
endometriosis, and central precocious puberty. The Company also has marketing
rights to certain Takeda products in select Latin American markets. The Company
also markets Lupron-R-, Lupron Depot-R-, and Lupron Depot-Ped-R- in select
markets outside the United States.
HOSPITAL AND LABORATORY PRODUCTS
Hospital and laboratory products include diagnostic systems for blood banks,
hospitals, commercial laboratories, and alternate-care testing sites;
intravenous and irrigation fluids and related administration equipment,
including electronic drug delivery systems; drugs and drug delivery systems;
anesthetics; critical care products; and other medical specialty products for
hospitals and alternate-care sites.
The principal products included in this segment are parenteral (intravenous
or I.V.) solutions and related administration equipment sold as the LifeCare-R-
line of products, LifeShield-R- sets, and Venoset-R- products; irrigating
fluids; parenteral nutritionals such as Aminosyn-R- and Liposyn-R-; Plum-R- and
Omni-Flow-R- electronic drug delivery systems; Abbott Pain Management
Provider-R-; patient-controlled analgesia (PCA) systems; venipuncture products;
hospital injectables; premixed I.V. drugs in various containers; ADD-Vantage-R-
and Nutrimix-R- drug and nutritional delivery systems; anesthetics, including
Pentothal-R-, isoflurane, and enflurane; hemodynamic monitoring equipment;
Calcijex-R-, an injectable agent for treatment of bone disease in hemodialysis
patients; critical care products including Opticath-R-; screening tests for
hepatitis B, HTLV-1, hepatitis B core, and hepatitis C; tests for detection of
AIDS antibodies and antigens, and other infectious disease detection systems;
tests for determining levels of abused drugs with the ADx-R- instrument;
physiological diagnostic tests; cancer monitoring tests including tests for
prostate specific antigen; laboratory tests and therapeutic drug monitoring
systems such as TDx-R-; clinical chemistry systems such as Abbott Spectrum-R-,
Abbott Spectrum-R- EPx-R-, Abbott Spectrum-R- CCx-TM-, and Quantum-TM-;
Commander-R- and IMx-R- lines of diagnostic instruments and chemical reagents
used with immunoassay diagnostics; Abbott Vision-R-, a desk-top blood analyzer,
the Abbott TestPack-R- system for diagnostic testing, and a full line of
hematology systems and reagents known as the Cell-Dyn-R- series. The hospital
and laboratory products the Company expects to introduce in the United States in
1994 include: AxSym-TM-, a diagnostic system; Abbott Maestro-TM-, a data
management system; and EnCounter-R-, a desktop hematology analyzer.
The Company markets hospital and laboratory products in the United States
and many other countries. These products are generally distributed to
wholesalers and directly to hospitals, laboratories, and physicians' offices
from distribution centers maintained by the Company. Sales are
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also made in the home infusion services market directly to patients receiving
treatment outside the hospital through marketing arrangements with hospitals and
other health care providers. Overseas sales are made either directly to
customers or through distributors, depending on the market served.
The hospital and laboratory products industry segment is highly competitive,
both in the United States and overseas. This segment is subject to competition
in technological innovation, price, convenience of use, service, instrument
warranty provisions, product performance, long-term supply contracts, and
product potential for overall cost effectiveness and productivity gains.
Products in this segment can be subject to rapid product obsolescence. The
Company has benefitted from technological advantages of certain of its current
products; however, these advantages may be reduced or eliminated as competitors
introduce new products.
The Company is one of the leading domestic manufacturers of I.V. and
irrigating solutions and related administration equipment, parenteral
nutritional products, anesthesia products, and drug delivery systems. It is also
the worldwide leader in in vitro diagnostic products, including thyroid tests,
therapeutic drug monitoring, cancer monitoring tests, diagnostic tests for the
detection of hepatitis and AIDS antibodies, and immunodiagnostic instruments.
INFORMATION WITH RESPECT TO THE COMPANY'S BUSINESS IN GENERAL
SOURCES AND AVAILABILITY OF RAW MATERIALS
The Company purchases, in the ordinary course of business, necessary raw
materials and supplies essential to the Company's operations from numerous
suppliers in the United States and overseas. There have been no recent
availability problems or significant supply shortages.
PATENTS, TRADEMARKS, AND LICENSES
The Company is aware of the desirability for patent and trademark protection
for its products. The Company owns, has applications pending for, and is
licensed under a substantial number of patents. Accordingly, where possible,
patents and trademarks are sought and obtained for the Company's products in the
United States and all countries of major marketing interest to the Company.
Principal trademarks and the products they cover are discussed in the Narrative
Description of Business on pages 1 and 2. These, and various patents which
expire during the period 1994 to 2011, in the aggregate, are believed to be of
material importance in the operation of the Company's business. However, the
Company believes that no single patent, license, trademark, (or related group of
patents, licenses, or trademarks) is material in relation to the Company's
business as a whole.
SEASONAL ASPECTS, CUSTOMERS, BACKLOG, AND RENEGOTIATION
There are no significant seasonal aspects to the Company's business. The
incidence of certain infectious diseases which occur at various times in
different areas of the world does, however, affect the demand for the Company's
anti-infective products. Orders for the Company's products are generally filled
on a current basis, and order backlog is not material to the Company's business.
No single customer accounted for sales equaling 10 percent or more of the
Company's consolidated net sales. No material portion of the Company's business
is subject to renegotiation of profits or termination of contracts at the
election of the government.
RESEARCH AND DEVELOPMENT
The Company spent $880,974,000 in 1993, $772,407,000 in 1992, and
$666,336,000 in 1991 on research to discover and develop new products and
processes and to improve existing products and processes. The Company continues
to concentrate research expenditures in pharmaceutical and diagnostic products.
ENVIRONMENTAL MATTERS
The Company believes that its operations comply in all material respects
with applicable laws and regulations concerning environmental protection.
Regulations under federal and state environmental laws impose stringent
limitations on emissions and discharges to the environment from various
manufacturing operations. The Company's capital and operating expenditures for
pollution control in
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1993 were approximately $32 million and $31 million, respectively. Capital and
operating expenditures for pollution control are estimated to approximate $39
million and $36 million, respectively, in 1994.
The Company is participating as one of many potentially responsible parties
in investigation and/ or remediation at eight locations in the United States and
Puerto Rico under the Comprehensive Environmental Response, Compensation, and
Liability Act, commonly known as Superfund. The aggregate costs of remediation
at these sites by all identified parties are uncertain but have been subject to
widely ranging estimates totaling as much as several hundred million dollars. In
many cases, the Company believes that the actual costs will be lower than these
estimates, and the fraction for which the Company may be responsible is
anticipated to be considerably less and will be paid out over a number of years.
The Company expects to participate in the investigation or cleanup at these
sites. The Company is also voluntarily investigating potential contamination at
five Company-owned sites, and has initiated voluntary remediation at four
Company-owned sites, in cooperation with the Environmental Protection Agency
(EPA) or similar state agencies.
While it is not feasible to predict with certainty the costs related to the
previously described investigation and cleanup activities, the Company believes
that such costs, together with other expenditures to maintain compliance with
applicable laws and regulations concerning environmental protection, should not
have a material adverse effect on the Company's earnings or competitive
position.
EMPLOYEES
The Company employed 49,659 persons as of December 31, 1993.
REGULATION
The development, manufacture, sale, and distribution of the Company's
products are subject to comprehensive government regulation, and the general
trend is toward more stringent regulation. Government regulation by various
federal, state, and local agencies, which includes detailed inspection of and
controls over research and laboratory procedures, clinical investigations, and
manufacturing, marketing, sampling, distribution, recordkeeping, storage and
disposal practices, substantially increases the time, difficulty, and costs
incurred in obtaining and maintaining the approval to market newly developed and
existing products. Government regulatory actions can result in the seizure or
recall of products, suspension or revocation of the authority necessary for
their production and sale, and other civil or criminal sanctions.
Continuing studies of the utilization, safety, and efficacy of health care
products and their components are being conducted by industry, government
agencies, and others. Such studies, which employ increasingly sophisticated
methods and techniques, can call into question the utilization, safety, and
efficacy of previously marketed products and in some cases have resulted, and
may in the future result, in the discontinuance of marketing of such products
and give rise to claims for damages from persons who believe they have been
injured as a result of their use.
The cost of human health care products continues to be a subject of
investigation and action by governmental agencies, legislative bodies, and
private organizations in the United States and other countries. In the United
States, most states have enacted generic substitution legislation requiring or
permitting a dispensing pharmacist to substitute a different manufacturer's
version of a pharmaceutical product for the one prescribed. Federal and state
governments continue to press efforts to reduce costs of Medicare and Medicaid
programs, including restrictions on amounts agencies will reimburse for the use
of products. Manufacturers must pay certain statutorily-prescribed rebates on
Medicaid purchases for reimbursement on prescription drugs under state Medicaid
plans. In addition, the Federal government follows a diagnosis-related group
(DRG) payment system for certain institutional services provided under Medicare
or Medicaid. The DRG system entitles a health care facility to a fixed
reimbursement based on discharge diagnoses rather than actual costs incurred in
patient treatment, thereby increasing the incentive for the facility to limit or
control expenditures for many health care products. The Veterans Health Care Act
of 1992 requires manufacturers to extend
4
additional discounts on pharmaceutical products to various federal agencies,
including the Department of Veterans Affairs, Department of Defense, and Public
Health Service entities and institutions.
In the United States, governmental cost-containment efforts have extended to
the federally subsidized Special Supplemental Food Program for Women, Infants,
and Children (WIC). All states participate in WIC and have sought and obtained
rebates from manufacturers of infant formula whose products are used in the
program. All of the states have also conducted competitive bidding for infant
formula contracts which require the use of specific infant formula products for
the state WIC program. The Child Nutrition and WIC Reauthorization Act of 1989
requires all states participating in WIC to engage in competitive bidding upon
the expiration of their existing infant formula contracts.
Governmental regulatory agencies now require manufacturers to pay additional
fees. Under the Prescription Drug User Fee Act of 1992, the Federal Food and
Drug Administration imposes substantial fees on various aspects of the approval,
manufacture and sale of prescription drugs. Congress is now considering
expanding user fees to medical devices. The Company believes that such
legislation, if enacted, will add considerable expense for the Company.
In the United States comprehensive legislation has been proposed that would
make significant changes to the availability, delivery and payment for
healthcare products and services. It is the intent of such proposed legislation
to provide health and medical insurance for all United States citizens and to
reduce the rate of increases in United States healthcare expenditures. If such
legislation is enacted, the Company believes it could have the effect of
reducing prices for, or reducing the rate of price increases for health and
medical insurance and medical products and services.
International operations are also subject to a significant degree of
government regulation. Many countries, directly or indirectly through
reimbursement limitations, control the selling price of most health care
products. Furthermore, many developing countries limit the importation of raw
materials and finished products. International regulations are having an impact
on United States regulations, as well. The International Organization for
Standardization ("ISO") provides the voluntary criteria for regulating medical
devices within the European Economic Community. The Food and Drug Administration
("FDA") has announced that it will attempt to harmonize its regulation of
medical devices with that of the ISO. Recently published changes to the FDA's
regulations governing the manufacture of medical devices appear to encompass and
exceed the ISO's approach to regulating medical devices. The FDA's adoption of
the ISO's approach to regulation and other changes to the manner in which the
FDA regulates medical devices will increase the cost of compliance with those
regulations.
Efforts to reduce health care costs are also being made in the private
sector. Health care providers have responded by instituting various cost
reduction and containment measures.
It is not possible to predict the extent to which the Company or the health
care industry in general might be affected by the matters discussed above.
INTERNATIONAL OPERATIONS
The Company markets products in approximately 130 countries through
affiliates and distributors. Most of the products discussed in the preceding
sections of this report are sold outside the United States. In addition, certain
products of a local nature and variations of product lines to meet local
regulatory requirements and marketing preferences are manufactured and marketed
to customers outside the United States. International operations are subject to
certain additional risks inherent in conducting business outside the United
States, including price and currency exchange controls, changes in currency
exchange rates, limitations on foreign participation in local enterprises,
expropriation, nationalization, and other governmental action.
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ITEM 2. PROPERTIES
The Company's corporate offices are located at One Abbott Park Road, Abbott
Park, Illinois 60064-3500. The locations of a number of the Company's principal
plants are listed below.
LOCATION INDUSTRY SEGMENTS OF PRODUCTS PRODUCED
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Abbott Park, Illinois Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Altavista, Virginia Pharmaceutical and Nutritional Products
Austin, Texas Hospital and Laboratory Products
Barceloneta, Puerto Rico Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Campoverde, Italy Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Casa Grande, Arizona Pharmaceutical and Nutritional Products
Columbus, Ohio Pharmaceutical and Nutritional Products
Delkenheim, Germany Hospital and Laboratory Products
Irving, Texas Hospital and Laboratory Products
Laurinburg, North Carolina Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Mexico City, Mexico Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Montreal, Canada Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Mountain View, California Hospital and Laboratory Products
North Chicago, Illinois Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Queenborough, England Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Rocky Mount, North Carolina Hospital and Laboratory Products
Salt Lake City, Utah Hospital and Laboratory Products
Santa Clara, California Hospital and Laboratory Products
Sligo/Donegal/Cootehill, Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Ireland
Sturgis, Michigan Pharmaceutical and Nutritional Products
St. Remy, France Pharmaceutical and Nutritional Products, and Hospital and Laboratory Products
Tokyo, Japan Hospital and Laboratory Products
In addition to the above, the Company has manufacturing facilities in eight
other locations in the United States and Puerto Rico. Overseas manufacturing
facilities are located in 19 other countries. The Company's facilities are
deemed suitable, provide adequate productive capacity, and are utilized at
normal and acceptable levels.
In the United States and Puerto Rico, the Company owns seven distribution
centers. The Company also has twelve United States research and development
facilities located at Abbott Park, Illinois; Andover, Massachusetts; Ashland,
Ohio; Columbus, Ohio (2 locations); Irving, Texas; Long Grove, Illinois; Madera,
California; Mountain View, California; North Chicago, Illinois; Salt Lake City,
Utah; and Santa Clara, California. Overseas, the Company has research and
development facilities in Argentina, Australia, Canada, Germany, Italy, Japan,
The Netherlands, and the United Kingdom.
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The corporate offices, all manufacturing plants, and all other facilities in
the United States and overseas are owned or leased by the Company or
subsidiaries of the Company.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various claims and legal proceedings including
(as of January 31, 1994) 7 antitrust suits and 6 investigations in connection
with the Company's sale and marketing of infant formula products, 138 product
liability cases that allege injuries to the offspring of women who ingested a
synthetic estrogen (DES) during pregnancy and 22 antitrust suits in connection
with the Company's sale and marketing of pharmaceuticals.
The infant formula antitrust suits, which are pending in various federal and
state courts, allege that the Company conspired with one or more of its
competitors to fix prices for infant formula, to rig a bid on a contract to
provide infant formula under the federal government's Special Supplemental Food
Program for Women, Infants, and Children (WIC), to deprive states of the
benefits of competition in providing rebates to the state pursuant to WIC sales,
and to restrain trade and monopolize the market for infant formula products in
violation of state and federal antitrust laws. The suits were brought on behalf
of individuals, a competitor, the Federal Trade Commission, and state
governmental agencies seeking treble damages, civil penalties, and other relief.
Three of the 7 cases are pending in state courts in Calhoun County and Shelby
County, Alabama and in Austin, Texas. The Calhoun County suit purports to be a
class action on behalf of Alabama consumers. The 4 other cases are pending in
federal courts in Los Angeles, California, Tallahassee, Florida, Baton Rouge,
Louisiana (this suit purports to be a class action on behalf of Louisiana
consumers), and Washington, D.C. The Company has filed responses to the
complaints denying all substantive allegations. The investigations are being
conducted by the Attorneys General of the states of California, Connecticut, New
York, Pennsylvania and Wisconsin and by the Canadian Bureau of Competition
Policy. The four shareholder derivative suits (which were consolidated in
federal court in Chicago, Illinois) that had been filed against certain of the
Company's officers and directors regarding the Company's sale and marketing of
infant formula products were dismissed with prejudice on January 31, 1994.
Twelve of the 22 pharmaceutical antitrust suits are pending in the United
States District Court for the Southern District of New York; 4 are pending in
state court in San Francisco County, California; the 6 remaining cases are
pending in federal district courts in San Francisco, California, Savannah,
Georgia, Minneapolis, Minnesota, Charleston, South Carolina, Austin, Texas, and
Galveston, Texas. These suits allege that various pharmaceutical manufacturers
have conspired to fix drug prices and/or to discriminate in pricing to retail
pharmacies by providing discounts to mail-order pharmacies, institutional
pharmacies, and HMOs. The suits were brought on behalf of retail pharmacies,
seek treble damages and other relief, and some purport to be class actions. The
Company intends to respond to the complaints denying all substantive
allegations.
While it is not feasible to predict the outcome of such pending claims,
proceedings, and investigations with certainty, management is of the opinion,
with which its General Counsel concurs, that their ultimate disposition should
not have a material adverse effect on the Company's financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
Officers of the Company are elected annually by the board of directors at
the first meeting held after the annual shareholders meeting. Each officer holds
office until a successor has been duly elected and qualified or until the
officer's death, resignation, or removal. Vacancies may be filled at any meeting
of the board. Any officer may be removed by the board of directors when, in its
judgment, removal would serve the best interests of the Company.
Current corporate officers, and their ages as of February 11, 1994, are
listed below. The officers' principal occupations and employment from January
1989 to present and the dates of their first
7
election as officers of the Company are also shown. Unless otherwise stated,
employment was by the Company for the period indicated. There are no family
relationships between any corporate officers or directors.
DUANE L. BURNHAM**, 52
1989 -- Vice Chairman and Chief Financial Officer, and Director.
1989 to 1990 -- Vice Chairman and Chief Executive Officer, and Director.
1990 to present -- Chairman of the Board and Chief Executive Officer, and
Director.
Elected Corporate Officer -- 1982.
THOMAS R. HODGSON**, 52
1989 to 1990 -- Executive Vice President and Director.
1990 to present -- President and Chief Operating Officer, and Director.
Elected Corporate Officer -- 1980.
ROBERT N. BECK**, 53
1989 to 1992 -- Executive Vice President, BankAmerica and Bank of America.
1992 to present -- Senior Vice President, Human Resources.
Elected Corporate Officer -- 1992.
PAUL N. CLARK**, 47
1989 to 1990 -- Vice President, Pharmaceutical Operations.
1990 to present -- Senior Vice President, Pharmaceutical Operations.
Elected Corporate Officer -- 1985.
GARY P. COUGHLAN**, 49
1989 -- Senior Vice President and Chief Financial Officer, Kraft, Inc.
1989 to 1990 -- Senior Vice President, Finance, Kraft General Foods.
1990 to present -- Senior Vice President, Finance and Chief Financial
Officer.
Elected Corporate Officer -- 1990.
LAEL F. JOHNSON**, 56
1989 -- Vice President, Secretary and General Counsel.
1989 to present -- Senior Vice President, Secretary and General Counsel.
Elected Corporate Officer -- 1981.
JOHN G. KRINGEL**, 54
1989 to 1990 -- Vice President, Hospital Products.
1990 to present -- Senior Vice President, Hospital Products.
Elected Corporate Officer -- 1981.
J. DUNCAN MCINTYRE**, 56
1989 to 1990 -- Vice President.
1990 to present -- Senior Vice President, International Operations.
Elected Corporate Officer -- 1987.
THOMAS M. MCNALLY**, 46
1989 -- Area Vice President, Pacific, Asia and Africa, Abbott International,
Ltd. (a subsidiary of the Company).
1989 to 1990 -- Vice President, Chemical and Agricultural Products.
1990 to 1993 -- Senior Vice President, Chemical and Agricultural Products.
1993 to present -- Senior Vice President, Ross Products.
Elected Corporate Officer -- 1989.
ROBERT L. PARKINSON, JR.**, 43
1989 -- Divisional Vice President, Commercial Operations.
1989 to 1990 -- Vice President, Corporate Hospital Marketing.
1990 to 1993 -- Vice President, European Operations.
8
1993 to present -- Senior Vice President, Chemical and Agricultural
Products.
Elected Corporate Officer -- 1989.
DAVID A. THOMPSON**, 52
1989 to 1990 -- Vice President, Diagnostic Operations.
1990 to present -- Senior Vice President, Diagnostic Operations.
Elected Corporate Officer -- 1982.
JOY A. AMUNDSON**, 39
1989 to 1990 -- General Manager, Alternate Site.
1990 -- Divisional Vice President and General Manager, Hospital Products
Business Sector.
1990 to 1994 -- Vice President, Corporate Hospital Marketing.
1994 to present -- Vice President, Health Systems.
Elected Corporate Officer -- 1990.
CHRISTOPHER B. BEGLEY, 41
1989 -- Director, Hospital Products Business Sector.
1989 to 1990 -- General Manager, Hospital Products Business Sector.
1990 to 1993 -- Divisional Vice President and General Manager, Hospital
Products Business Sector.
1993 -- Vice President, Hospital Products Business Sector.
Elected Corporate Officer -- 1993.
THOMAS D. BROWN, 45
1989 to 1992 -- Divisional Vice President, Western Hemisphere.
1992 to 1993 -- Divisional Vice President, Diagnostic Commercial Operations.
1993 to present -- Vice President, Diagnostic Commercial Operations.
Elected Corporate Officer -- 1993.
GARY R. BYERS**, 52
1989 to 1993 -- Divisional Vice President, Corporate Auditing.
1993 to present -- Vice President, Internal Audit.
Elected Corporate Officer -- 1993.
KENNETH W. FARMER**, 48
1989 -- Vice President, Management Information Services.
1989 to present -- Vice President, Management Information Services and
Administration.
Elected Corporate Officer -- 1985.
THOMAS C. FREYMAN**, 39
1989 to 1991 -- Treasurer, Abbott International, Ltd. (a subsidiary of the
Company).
1991 to present -- Vice President and Treasurer.
Elected Corporate Officer -- 1991.
JAY B. JOHNSTON, 50
1989 to 1992 -- President, Dainabot Co., Ltd. (an affiliate of the Company)
and General Manager Asia Pacific, Abbott Diagnostics
Division.
1992 -- Divisional Vice President, Business Development.
1992 to 1993 -- Divisional Vice President and General Manager, Diagnostic
Assays and Operations.
1993 to present -- Corporate Vice President, Diagnostic Assays and
Operations.
Elected Corporate Officer -- 1993.
JAMES J. KOZIARZ, 44
1989 to 1990 -- General Manager, Hepatitis/Retrovirus Business Sector.
1990 to 1992 -- Vice President and General Manager, Diagnostic Assays.
1992 to present -- Vice President, Diagnostic Products Research and
Development.
Elected Corporate Officer -- 1993.
9
CHRISTOPHER A. KUEBLER, 40
1989 to 1992 -- Divisional Vice President, Marketing.
1992 to 1993 -- Divisional Vice President, Sales and Marketing.
1993 to present -- Vice President, European Operations.
Elected Corporate Officer -- 1993.
JOHN F. LUSSEN**, 52
1989 to present -- Vice President, Taxes.
Elected Corporate Officer -- 1985.
DAVID V. MILLIGAN, PH.D., 53
1989 to 1992 -- Vice President, Diagnostic Products Research and
Development.
1992 to present -- Vice President, Pharmaceutical Products Research and
Development.
Elected Corporate Officer -- 1984.
RICHARD H. MOREHEAD**, 59
1989 to present -- Vice President, Corporate Planning and Development.
Elected Corporate Officer -- 1985.
THEODORE A. OLSON**, 55
1989 to present -- Vice President and Controller.
Elected Corporate Officer -- 1988.
CARL A. SPALDING, 48
1989 to 1992 -- Vice President, International, Johnson & Johnson.
1992 to present -- Vice President, General Manager, Ross Products.
Elected Corporate Officer -- 1993.
WILLIAM H. STADTLANDER, 48
1989 to 1992 -- Divisional Vice President, Medical Nutritionals.
1992 to present -- Divisional Vice President and General Manager, Medical
Nutritionals.
Elected Corporate Officer -- 1993.
DANIEL O. STRUBLE**, 53
1989 to present -- Vice President, Corporate Engineering.
Elected Corporate Officer -- 1987.
ELLEN M. WALVOORD**, 54
1989 to 1991 -- Director, Corporate Communications.
1991 -- Vice President, Investor Relations.
1991 to present -- Vice President, Investor Relations and Public Affairs.
Elected Corporate Officer -- 1991.
JOSEF WENDLER, 44
1989 to 1990 -- General Manager, Austria & Switzerland.
1990 to 1992 -- Regional Director, Europe, Diagnostic Division.
1992 to 1993 -- Divisional Vice President, Pacific, Asia, Africa.
1993 to present -- Vice President, Pacific/ Asia /Africa Operations.
Elected Corporate Officer -- 1993.
MILES D. WHITE, 38
1989 to 1990 -- Director of Marketing for the U.S., Abbott Diagnostics
Division.
1990 -- Business Unit General Manager, Physiological Diagnostics, Abbott
Diagnostics Division and Business Unit General Manager, Cancer
Diagnostics.
1990 to 1992 -- Divisional Vice President and General Manager, Hospital
Laboratory Sector.
1992 to 1993 -- Divisional Vice President and General Manager, Diagnostic
Systems and Operations.
1993 to present -- Vice President, Diagnostic Systems and Operations.
Elected Corporate Officer -- 1993.
10
DON G. WRIGHT**, 51
1989 to present -- Vice President, Corporate Quality Assurance and
Regulatory Affairs.
Elected Corporate Officer -- 1988.
- ------------------------
** Pursuant to Item 401(b) of Regulation S-K the Company has identified these
persons as "executive officers" within the meaning of Item 401(b).
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
PRINCIPAL MARKET
The principal market for the Company's common shares is the New York Stock
Exchange. Shares are also listed on the Chicago and Pacific Stock Exchanges and
are traded on the Boston, Cincinnati, and Philadelphia Exchanges. Overseas, the
Company's shares are listed on the London Stock Exchange, Tokyo Stock Exchange,
and the Swiss Stock Exchanges of Zurich, Basel, Geneva, and Lausanne.
MARKET PRICE PER SHARE
------------------------------------------
1993 1992
-------------------- --------------------
HIGH LOW HIGH LOW
--------- --------- --------- ---------
First Quarter....................................................... 30 7/8 22 5/8 34 1/8 29 3/8
Second Quarter...................................................... 28 5/8 23 1/4 34 26 1/8
Third Quarter....................................................... 27 5/8 22 3/4 31 5/8 27 3/8
Fourth Quarter...................................................... 30 1/8 26 1/8 33 26 1/2
Market prices are as reported by the New York Stock Exchange composite
transaction reporting system.
SHAREHOLDERS
There were 82,947 shareholders of record of Abbott common shares as of
December 31, 1993.
DIVIDENDS
Quarterly dividends of $.17 per share and $.15 per share were declared on
common shares in 1993 and 1992, respectively after reflecting the May 29, 1992
stock split.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated herein by reference for the years 1989 through 1993 are the
applicable portions of the section captioned "Summary of Selected Financial
Data" of the 1993 Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated herein by reference is management's discussion and analysis of
financial condition and results of operations for the years 1993, 1992, and 1991
found under the section captioned "Financial Review" of the 1993 Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated herein by reference are the portions of the 1993 Annual Report
captioned Consolidated Balance Sheet, Consolidated Statement of Income,
Consolidated Statement of Cash Flows, Consolidated Statement of Shareholders'
Investment, Notes to Consolidated Financial Statements and Report of Independent
Public Accountants (which contains the related report of Arthur Andersen & Co.
dated January 14, 1994). Data relating to quarterly interim results is found in
Note 8.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
11
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference are "Information Concerning Nominees for
Directors" and "Compliance with Section 16(a) of The Securities Exchange Act of
1934" found in the 1994 Abbott Laboratories Proxy Statement ("1994 Proxy
Statement"), which will be filed with the Commission on or about March 4, 1994.
ITEM 11. EXECUTIVE COMPENSATION
The material in the 1994 Proxy Statement under the heading "Executive
Compensation," other than the Report of the Compensation Committee and the
Performance Graph, are hereby incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference is the text found under the caption
"Information Concerning Security Ownership" in the 1994 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference is that portion of the 1994 Proxy Statement
under the caption "Compensation Committee Interlocks and Insider Participation."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS FORM 10-K.
1. FINANCIAL STATEMENTS: The Consolidated Financial Statements for the
years ended December 31, 1993, 1992, and 1991 and the related report of Arthur
Andersen & Co. dated January 14, 1994 appearing under the portions of the 1993
Annual Report captioned Consolidated Balance Sheet, Consolidated Statement of
Earnings, Consolidated Statement of Cash Flows, Consolidated Statement of
Shareholders' Investment, Notes to Consolidated Financial Statements and Report
of Independent Public Accountants, respectively, are incorporated by reference
in response to Item 14(a)1. With the exception of the portions of the 1993
Annual Report specifically incorporated herein by reference, such Report shall
not be deemed filed as part of this Annual Report on Form 10-K or otherwise
deemed subject to the liabilities of Section 18 of the Securities Exchange Act
of 1934.
2. FINANCIAL STATEMENT SCHEDULES: The required financial statement
schedules are found on the pages indicated below. These schedules should be read
in conjunction with the Consolidated Financial Statements in the 1993 Annual
Report:
PAGE NO./
SCHEDULES EXHIBIT NO.
- ------------------------------------------------------------------------------------------------------ ---------------
Investment Securities Maturing After One Year (Schedule I)............................................ p. 18
Property and Equipment (Schedule V)................................................................... p. 19
Accumulated Depreciation and Amortization of Property and Equipment (Schedule VI)..................... p. 20
Valuation and Qualifying Accounts (Schedule VIII)..................................................... p. 21
Short-term Borrowings (Schedule IX)................................................................... p. 22
Supplementary Consolidated Statement of Earnings Information (Schedule X)............................. p. 23
Schedules II, III, IV, VII, XI, XII, and XIII are not submitted because they are not applicable or not
required.
Supplemental Report of Independent Public Accountants................................................. Exh. 23.1
Consent of Independent Public Accountants............................................................. Exh. 23.2
Individual Financial Statements of the registrant have been omitted pursuant to Rule 3.05, paragraph
(1) of Regulation S-X.
3. EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K: The information called
for by this paragraph is incorporated herein by reference to the Exhibit Index
on pages 16 and 17 of this Form 10-K.
12
(b) REPORTS ON FORM 8-K DURING THE QUARTER ENDED DECEMBER 31, 1993:
No reports on Form 8-K were filed during the quarter ended December 31,
1993.
(c) EXHIBITS FILED (SEE EXHIBIT INDEX ON PAGES 16 AND 17).
(D) FINANCIAL STATEMENT SCHEDULES FILED (SEE PAGES 18 THROUGH 23).
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Abbott Laboratories has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ABBOTT LABORATORIES
By /s/ DUANE L. BURNHAM
Duane L. Burnham
Chairman of the Board and
Chief Executive Officer
Date: February 11, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Abbott
Laboratories and in the capacities and on the dates indicated:
/s/ DUANE L. BURNHAM
Duane L. Burnham
Chairman of the Board,
Chief Executive Officer, and
Director of Abbott Laboratories
(principal executive officer)
Date: February 11, 1994
/s/ GARY P. COUGHLAN
Gary P. Coughlan
Senior Vice President, Finance and
Chief Financial Officer
(principal financial officer)
Date: February 11, 1994
/s/ THOMAS R. HODGSON
Thomas R. Hodgson
President, Chief Operating Officer,
and Director of Abbott Laboratories
Date: February 11, 1994
/s/ THEODORE A. OLSON
Theodore A. Olson
Vice President and Controller
(principal accounting officer)
Date: February 11, 1994
/s/ K. FRANK AUSTEN
K. Frank Austen, M.D.
Director of Abbott Laboratories
Date: February 11, 1994
/s/ H. LAURANCE FULLER
H. Laurance Fuller
Director of Abbott Laboratories
Date: February 11, 1994
/s/ BERNARD J. HAYHOE
Bernard J. Hayhoe
Director of Abbott Laboratories
Date: February 11, 1994
/s/ ALLEN F. JACOBSON
Allen F. Jacobson
Director of Abbot Laboratories
Date: February 11, 1994
14
/s/ DAVID A. JONES
David A. Jones
Director of Abbott Laboratories
Date: February 11, 1994
/s/ BOONE POWELL, JR.
Boone Powell, Jr.
Director of Abbott Laboratories
Date: February 11, 1994
/s/ A. BARRY RAND
A. Barry Rand
Director of Abbott Laboratories
Date: February 11, 1994
/s/ W. ANN REYNOLDS
W. Ann Reynolds
Director of Abbott Laboratories
Date: February 11, 1994
/s/ WILLIAM D. SMITHBURG
William D. Smithburg
Director of Abbott Laboratories
Date: February 11, 1994
/s/ JOHN R. WALTER
John R. Walter
Director of Abbott Laboratories
Date: February 11, 1994
/s/ WILLIAM L. WEISS
William L. Weiss
Director of Abbott Laboratories
Date: February 11, 1994
15
EXHIBIT INDEX
ABBOTT LABORATORIES
ANNUAL REPORT
FORM 10-K
1993
REG.S-K
EXHIBIT
TABLE
ITEM NO.
- ----------
3.1 * ARTICLES OF INCORPORATION--ABBOTT LABORATORIES, FILED AS AN
EXHIBIT (PAGES 22-30) TO THE ABBOTT LABORATORIES 1992 ANNUAL
REPORT ON FORM 10-K.
3.2 * CORPORATE BYLAWS--ABBOTT LABORATORIES, FILED AS EXHIBIT 3 TO
THE ABBOTT LABORATORIES QUARTERLY REPORT FOR THE QUARTER
ENDED JUNE 30, 1993 ON FORM 10-Q.
10 MATERIAL CONTRACTS.
10.1 * Supplemental Plan--Abbott Laboratories Extended Disability
Plan, filed as an exhibit (pages 50-51) to the 1992 Abbott
Laboratories Annual Report on Form 10-K.
10.2 * The Abbott Laboratories 1981 Incentive Stock Program, filed
as an exhibit (pages 52-62) to the 1992 Abbott Laboratories
Annual Report on Form 10-K.
10.3 * The Abbott Laboratories 1986 Incentive Stock Program, filed
as an exhibit (pages 37-59) to the 1989 Abbott Laboratories
Annual Report on Form 10-K.
10.4 * The Abbott Laboratories 1991 Incentive Stock Program, filed
as an exhibit (pages 128-149) to the 1990 Abbott
Laboratories Annual Report on Form 10-K.
10.5 * Consulting agreement between Abbott Laboratories and K.
Frank Austen, M.D. dated September 13, 1991, filed as an
exhibit (pages 63-66) to the 1992 Abbott Laboratories Annual
Report on Form 10-K.
10.6 * Indenture dated as of October 1, 1993 between Abbott
Laboratories and Harris Trust and Savings Bank, filed as
Exhibit 4.1 to the Abbott Laboratories Quarterly Report for
the Quarter ended September 30, 1993 on Form 10-Q.
10.7 Abbott Laboratories 401(k) Supplemental Plan.
10.8 Abbott Laboratories Supplemental Pension Plan.
10.9 The 1986 Abbott Laboratories Management Incentive Plan.
10.10 Abbott Laboratories Non-Employee Directors' Fee Plan.
11 CALCULATION OF FULLY DILUTED EARNINGS PER SHARE.
12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES.
13 THE PORTIONS OF THE ABBOTT LABORATORIES ANNUAL REPORT FOR
THE YEAR ENDED DECEMBER 31, 1993 CAPTIONED FINANCIAL REVIEW,
CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF
EARNINGS, CONSOLIDATED STATEMENT OF CASH FLOWS, CONSOLIDATED
STATEMENT OF SHAREHOLDERS' INVESTMENT, NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS, REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS, AND THE APPLICABLE PORTIONS OF THE SECTION
CAPTIONED SUMMARY OF FINANCIAL DATA FOR THE YEARS 1989
THROUGH 1993.
16
REG.S-K
EXHIBIT
TABLE
ITEM NO.
- ----------
21 SUBSIDIARIES OF ABBOTT LABORATORIES.
23.1 SUPPLEMENTAL REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.
23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
THE 1994 ABBOTT LABORATORIES PROXY STATEMENT WILL BE FILED
WITH THE COMMISSION UNDER SEPARATE COVER ON OR ABOUT MARCH
4, 1994.
- ---------
* Incorporated herein by reference.
The Company will furnish copies of any of the above exhibits to a
shareholder upon written request to the Corporate Secretary, Abbott
Laboratories, One Abbott Park Road, Abbott Park, Illinois 60064-3500.
17
ABBOTT LABORATORIES AND SUBSIDIARIES
SCHEDULE I--INVESTMENT SECURITIES MATURING AFTER ONE YEAR
DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
PRINCIPAL
AMOUNT OF MARKET
NAME OF ISSUE AND TITLE OF EACH ISSUE SECURITY COST VALUE
- -------------------------------------------------------------------------- ----------- ----------- -----------
Time deposits and certificates of deposit due 1995 through 1998 at
interest rates from 7.80% to 9.50%....................................... $ 34,500 $ 34,500 $ 38,189
Debt obligations issued or guaranteed by various
governments or government agencies:
Mortgage Backed Certificates, guaranteed by Government
National Mortgage Association, due 2003 through 2012 at
interest rates from 7.25% to 16.00%.................................... 81,309 82,058 86,765
Other Notes, Certificates, and Debentures due 1995
through 2001 at interest rates from 2.70% to 14.375%................... 60,554 60,554 60,595
----------- ----------- -----------
Total debt obligations issued or guaranteed by various
governments or government agencies....................................... 141,863 142,612 147,360
Corporate debt obligations, due 1995 to 2001 at interest rates
from 2.763% to 8.875%.................................................... 44,703 44,703 46,330
----------- ----------- -----------
Total Investment Securities Maturing after One Year....................... $ 221,066 $ 221,815 $ 231,879
----------- ----------- -----------
----------- ----------- -----------
18
ABBOTT LABORATORIES AND SUBSIDIARIES
SCHEDULE V--PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
BALANCE AT
BEGINNING RETIREMENTS TRANSLATION BALANCE AT
CLASSIFICATION OF YEAR ADDITIONS AND SALES ADJUSTMENTS END OF YEAR
- ---------------------------------- ---------- ------------- ---------- --------- -----------
Year Ended December 31, 1993:
Land............................ $ 120,617 $ 15,193 $ -- $ 1,826 $ 137,636
Buildings (including leasehold
and
land improvements)............ 1,064,974 209,034 (4,054) (8,334) 1,261,620
Equipment....................... 3,735,259 645,739 (145,617) (66,102) 4,169,279
Construction in Progress........ 576,291 82,766(a) (5,865) (581) 652,611
---------- ------------- ---------- --------- -----------
$5,497,141 $ 952,732 $(155,536) $(73,191) $ 6,221,146
---------- ------------- ---------- --------- -----------
---------- ------------- ---------- --------- -----------
Year Ended December 31, 1992:
Land............................ $ 64,984 $ 59,016 $ (2,934) $ (449) $ 120,617
Buildings (including leasehold
and land improvements)........ 950,810 130,844 (8,754) (7,926) 1,064,974
Equipment....................... 3,304,062 647,640 (166,162) (50,281) 3,735,259
Construction in Progress........ 465,367 169,747(a) (53,812) (5,011) 576,291
---------- ------------- ---------- --------- -----------
$4,785,223 $1,007,247 $(231,662) $(63,667) $ 5,497,141
---------- ------------- ---------- --------- -----------
---------- ------------- ---------- --------- -----------
Year Ended December 31, 1991:
Land............................ $ 64,907 $ 1,954 $ (1,093) $ (784) $ 64,984
Buildings (including leasehold
and
land improvements)............ 912,256 50,632 (4,068) (8,010) 950,810
Equipment....................... 3,016,483 475,462 (144,612) (43,271) 3,304,062
Construction in Progress........ 263,904 204,709(a) (2,496) (750) 465,367
---------- ------------- ---------- --------- -----------
$4,257,550 $ 732,757 $(152,269) $(52,815) $ 4,785,223
---------- ------------- ---------- --------- -----------
---------- ------------- ---------- --------- -----------
- ---------
(a) Net of transfers to Land, Buildings, and Equipment.
19
ABBOTT LABORATORIES AND SUBSIDIARIES
SCHEDULE VI--ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
ADDITIONS
BALANCE AT CHARGED TO
BEGINNING COSTS AND RETIREMENTS TRANSLATION BALANCE AT
CLASSIFICATION OF YEAR EXPENSES AND SALES ADJUSTMENTS END OF YEAR
- -------------------------------------- ------------- ------------ ------------- ------------- -------------
Year Ended December 31, 1993:
Buildings (including leasehold and
land improvements)................ $ 327,876 $ 44,178 $ (3,274) $ (2,219) $ 366,561
Equipment........................... 2,070,027 439,903 (128,047) (38,289) 2,343,594
------------- ------------ ------------- ------------- -------------
$ 2,397,903 $ 484,081 $ (131,321) $ (40,508) $ 2,710,155
------------- ------------ ------------- ------------- -------------
------------- ------------ ------------- ------------- -------------
Year Ended December 31, 1992:
Buildings (including leasehold and
land improvements)................ $ 292,381 $ 40,485 $ (2,355) $ (2,635) $ 327,876
Equipment........................... 1,830,759 387,297 (117,619) (30,410) 2,070,027
------------- ------------ ------------- ------------- -------------
$ 2,123,140 $ 427,782 $ (119,974) $ (33,045) $ 2,397,903
------------- ------------ ------------- ------------- -------------
------------- ------------ ------------- ------------- -------------
Year Ended December 31, 1991:
Buildings (including leasehold and
land improvements)................ $ 260,141 $ 35,258 $ (1,074) $ (1,944) $ 292,381
Equipment........................... 1,621,627 343,759 (109,439) (25,188) 1,830,759
------------- ------------ ------------- ------------- -------------
$ 1,881,768 $ 379,017 $ (110,513) $ (27,132) $ 2,123,140
------------- ------------ ------------- ------------- -------------
------------- ------------ ------------- ------------- -------------
20
ABBOTT LABORATORIES AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)
AMOUNTS
BALANCE AT PROVISIONS CHARGED OFF,
ALLOWANCES FOR DOUBTFUL BEGINNING CHARGED TO NET OF BALANCE AT
ACCOUNTS AND SALES DEDUCTIONS OF YEAR INCOME (A) RECOVERIES END OF YEAR
- ------------------------------------------------------ ------------ ------------ -------------- -------------
1993.................................................. $ 106,857 $ 29,441 $ (19,373) $ 116,925
------------ ------------ -------------- -------------
------------ ------------ -------------- -------------
1992.................................................. $ 82,244 $ 41,598 $ (16,985) $ 106,857
------------ ------------ -------------- -------------
------------ ------------ -------------- -------------
1991.................................................. $ 65,455 $ 32,750 $ (15,961) $ 82,244
------------ ------------ -------------- -------------
------------ ------------ -------------- -------------
- ---------
(a) Represents provisions related to allowances for doubtful accounts and the
net change in the allowances for sales deductions.
21
ABBOTT LABORATORIES AND SUBSIDIARIES
SCHEDULE IX SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
1993 1992 1991
----------- ----------- -----------
Domestic:
Average Borrowings During the Year(a).................................... $ 836,888 $ 581,171 $ 409,521
Weighted Average Interest Rate During the Year(b)........................ 4.0% 4.4% 6.8%
Highest Level of Borrowings at any Month-end During the Year............. $ 981,000 $ 779,000 $ 452,000
Weighted Average Interest Rate at December 31............................ 3.6% 4.0% 6.0%
Borrowings at December 31(c)............................................. $ 750,000 $ 768,000 $ 399,000
International:
Average Borrowings During the Year(d).................................... $ 153,092 $ 175,582 $ 189,979
Weighted Average Interest Rate During the Year(b)........................ 11.6% 14.4% 17.2%
Highest Level of Borrowings at any Month-end During the Year............. $ 196,955 $ 218,526 $ 275,871
Weighted Average Interest Rate at December 31............................ 8.2% 10.6% 17.7%
Borrowings at December 31(e)............................................. $ 91,514 $ 141,116 $ 124,526
- ---------
(a) Calculated by weighting the average daily balances for the year.
(b) Calculated by dividing interest expense by average borrowings during the
year.
(c) Consists principally of commercial paper.
(d) Represents the sum of the beginning of year and month-end balances divided
by 13.
(e) Consists principally of bank loans.
22
ABBOTT LABORATORIES AND SUBSIDIARIES
SCHEDULE X-SUPPLEMENTARY CONSOLIDATED
STATEMENT OF EARNINGS INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)
CHARGED TO COSTS AND EXPENSES
-------------------------------------
ITEM 1993 1992 1991
- --------------------------------------------------------------------------- ----------- ----------- -----------
Maintenance and Repairs.................................................... $ 200,197 $ 179,771 $ 161,721
----------- ----------- -----------
----------- ----------- -----------
Advertising................................................................ $ 143,902 $ 141,898 $ 172,386
----------- ----------- -----------
----------- ----------- -----------
Royalties.................................................................. $ 107,356 $ 104,085 $ 109,692
----------- ----------- -----------
----------- ----------- -----------
23