10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                to                                         

Commission File No. 1-2189

ABBOTT LABORATORIES

An Illinois Corporation	I.R.S. Employer Identification No.
	36-0698440

100 Abbott Park Road

Abbott Park, Illinois 60064-6400

Telephone:  (847) 937-6l00

Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.         Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer x	Accelerated Filer o
Non-Accelerated Filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of March 31, 2011, Abbott Laboratories had 1,554,282,988 common shares without par value outstanding.

PART  I.  FINANCIAL INFORMATION

Abbott Laboratories and Subsidiaries

Condensed Consolidated Financial Statements

(Unaudited)

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited)

(dollars and shares in thousands except per share data)

	Three Months Ended March 31
	2011			2010
Net Sales	$	9,040,850		$	7,698,354
Cost of products sold	3,858,983			3,335,104
Research and development	930,400			730,367
Acquired in-process research and development	100,000			—
Selling, general and administrative	2,850,318			2,162,400
Total Operating Cost and Expenses	7,739,701			6,227,871
Operating Earnings	1,301,149			1,470,483
Interest expense	145,587			118,201
Interest (income)	(21,716		)	(29,531		)
Net foreign exchange loss (gain)	(32,366		)	70,019
Other (income) expense, net	140,858			(10,413		)
Earnings Before Taxes	1,068,786			1,322,207
Taxes on Earnings	204,968			319,192
Net Earnings	$	863,818		$	1,003,015
Basic Earnings Per Common Share	$	0.56		$	0.65
Diluted Earnings Per Common Share	$	0.55		$	0.64
Cash Dividends Declared Per Common Share	$	0.48		$	0.44
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share	1,551,755			1,547,815
Dilutive Common Stock Options and Awards	6,886			13,508
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options and Awards	1,558,641			1,561,323
Outstanding Common Stock Options Having No Dilutive Effect	63,202			29,403

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

2

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(dollars in thousands)

	Three Months Ended March 31
	2011			2010
Cash Flow From (Used in) Operating Activities:
Net earnings	$	863,818		$	1,003,015
Adjustments to reconcile earnings to net cash from operating activities -
Depreciation	354,120			287,249
Amortization of intangibles	391,547			275,252
Share-based compensation	175,808			173,866
Acquired in-process research and development	100,000			—
Trade receivables	298,953			291,638
Inventories	44,784			(49,631		)
Other, net	(217,884		)	(458,637		)
Net Cash From Operating Activities	2,011,146			1,522,752
Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment	(391,813		)	(245,143		)
Acquisitions of businesses, net of cash acquired	—			(6,415,648		)
(Purchases of) proceeds from sales of investment securities, net	(1,917,221		)	874,139
Deposit of restricted funds	—			(1,870,000		)
Other	7,804			(2,108		)
Net Cash (Used in) Investing Activities	(2,301,230		)	(7,658,760		)
Cash Flow From (Used in) Financing Activities:
Proceeds from issuance of short-term debt and other	396,213			775,006
Payment of long-term debt	(500,582		)	(1,254		)
Purchases of common shares	(71,750		)	(861,368		)
Proceeds from stock options exercised, including income tax benefit	175,752			188,169
Dividends paid	(683,967		)	(620,752		)
Net Cash (Used in) Financing Activities	(684,334		)	(520,199		)
Effect of exchange rate changes on cash and cash equivalents	66,203			(586,312		)
Net (Decrease) in Cash and Cash Equivalents	(908,215		)	(7,242,519		)
Cash and Cash Equivalents, Beginning of Year	3,648,371			8,809,339
Cash and Cash Equivalents, End of Period	$	2,740,156		$	1,566,820

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

3

Abbott Laboratories and Subsidiaries

Condensed Consolidated Balance Sheet

(Unaudited)

(dollars in thousands)

	March 31 2011			December 31 2010
				(As Adjusted
				See Note 1)
Assets
Current Assets:
Cash and cash equivalents	$	2,740,156		$	3,648,371
Investments, primarily time deposits and certificates of deposit	3,762,124			1,803,079
Restricted funds, primarily U.S. treasury bills	1,873,559			1,872,490
Trade receivables, less allowances of $406,624 in 2011 and $388,564 in 2010	7,160,219			7,184,034
Inventories:
Finished products	2,289,283			2,058,735
Work in process	491,423			383,580
Materials	620,290			746,419
Total inventories	3,400,996			3,188,734
Prepaid expenses, deferred income taxes, and other receivables	4,710,078			4,620,821
Total Current Assets	23,647,132			22,317,529
Investments	390,122			302,049
Property and Equipment, at Cost	17,337,024			17,374,302
Less: accumulated depreciation and amortization	9,258,829			9,403,346
Net Property and Equipment	8,078,195			7,970,956
Intangible Assets, net of amortization	12,207,800			12,151,628
Goodwill	16,629,027			15,930,077
Deferred Income Taxes and Other Assets	699,087			790,027
	$	61,651,363		$	59,462,266
Liabilities and Shareholders’ Investment
Current Liabilities:
Short-term borrowings	$	4,718,336		$	4,349,796
Trade accounts payable	1,577,168			1,535,759
Salaries, wages and commissions	981,520			1,328,665
Other accrued liabilities	6,396,119			6,014,772
Dividends payable	746,053			680,749
Income taxes payable	1,272,280			1,307,723
Current portion of long-term debt	1,533,627			2,044,970
Total Current Liabilities	17,225,103			17,262,434
Long-term Debt	12,530,246			12,523,517
Post-employment Obligations, Deferred Income Taxes and Other Long-term Liabilities	7,175,682			6,911,184
Commitments and Contingencies
Shareholders’ Investment:
Preferred shares, one dollar par value Authorized — 1,000,000 shares, none issued	—			—
Common shares, without par value Authorized - 2,400,000,000 shares Issued at stated capital amount - Shares: 2011: 1,623,356,151; 2010: 1,619,689,876	8,842,675			8,744,703
Common shares held in treasury, at cost - Shares: 2011: 69,073,163; 2010: 72,705,928	(3,718,827		)	(3,916,823		)
Earnings employed in the business	19,323,753			19,215,768
Accumulated other comprehensive income (loss)	182,049			(1,366,846		)
Total Abbott Shareholders’ Investment	24,629,650			22,676,802
Noncontrolling Interests in Subsidiaries	90,682			88,329
Total Shareholders’ Investment	24,720,332			22,765,131
	$	61,651,363		$	59,462,266

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

4

Abbott Laboratories and Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited)

Note 1 — Basis of Presentation and Change in Accounting Principle

The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnote disclosures normally included in audited financial statements.  However, in the opinion of management, all adjustments (which include only normal adjustments) necessary to present fairly the results of operations, financial position and cash flows have been made.  It is suggested that these statements be read in conjunction with the financial statements included in Abbott’s Annual Report on Form 10-K for the year ended December 31, 2010.

The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions.  Prior to January 1, 2011, the accounts of foreign subsidiaries were consolidated based on a fiscal year ended November 30 due to the time needed to consolidate these subsidiaries.  Effective January 1, 2011, the one month lag in the consolidation of the accounts of foreign subsidiaries was eliminated and the year-end of foreign subsidiaries was changed to December 31.  Abbott believes that the change in accounting principle related to the elimination of the one month reporting lag is preferable because it will result in more contemporaneous reporting of the results of foreign subsidiaries.  In accordance with applicable accounting literature, a change in subsidiaries’ year-end is treated as a change in accounting principle and requires retrospective application.  The cumulative effect of the change was an increase in retained earnings of $289 million as of January 1, 2009 and a corresponding decrease in other long-term liabilities.  The impact of the change was not material to the results of operations for the previously reported annual and interim periods after January 1, 2009, and thus, those results have not been revised.  A charge of $137 million was recorded to Other (income) expense, net in the three months ended March 31, 2011 to recognize the cumulative immaterial impacts to 2009 and 2010.  Had the financial statements been revised, net sales, operating earnings and net earnings in calendar 2009 would have increased by $211 million, $36 million and $38 million, respectively, and net sales, operating earnings and net earnings in calendar 2010 would have decreased by $21 million, $195 million and $175 million.  In addition, net sales, operating earnings and net earnings for the three months ended March 31, 2010 would have increased by $268 million, $33 million and $38 million, respectively, had the first quarter 2010 financial statements been revised.

Note 2 — Supplemental Financial Information

Unvested restricted stock units that contain non-forfeitable rights to dividends are treated as participating securities and are included in the computation of earnings per share under the two-class method.  Under the two-class method, net earnings are allocated between common shares and participating securities.  Net earnings allocated to common shares for the three months ended March 31, 2011 and 2010 were $862 million and $1.001 billion, respectively.

Net foreign exchange loss (gain) in 2010 includes a charge of approximately $86 million for the impact of the devaluation of the bolivar currency in Venezuela on balance sheet translation.

Other, net in Net cash from operating activities for 2011 and 2010 includes the effects of contributions to defined benefit plans of $288 million and $466 million, respectively, and to the post-employment medical and dental benefit plans of $40 million and $66 million, respectively.

The judgment entered by the U.S. District Court for the Eastern District of Texas against Abbott in its litigation with New York University and Centocor, Inc. required Abbott to secure the judgment in the event that its appeal to the Federal Circuit court was unsuccessful in overturning the district court’s decision.  In the first quarter of 2010, Abbott deposited $1.87 billion with an escrow agent and considers these assets to be restricted. On February 23, 2011, the Federal Circuit reversed the district court’s final judgment and found Centocor’s patent invalid.  On April 25, 2011 Centocor petitioned the Federal Circuit to rehear and reconsider the decision.

5

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

The components of long-term investments as of March 31, 2011 and December 31, 2010 are as follows:

	March 31		December 31
(dollars in millions)	2011		2010
Equity securities	$	234	$	240
Debt obligations issued by various governments	156		62
Total	$	390	$	302

Note 3 — Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the benefit of lower statutory tax rates and tax exemptions in several foreign taxing jurisdictions.  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 by up to $1.2 billion, including cash adjustments, within the next twelve months as a result of concluding various tax matters.  Additional cash payments as a result of concluding these various tax matters beyond what is already on deposit with the tax authorities is not expected to be material.  As a result of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act which were signed into law in the first quarter of 2010, Abbott recorded a charge of approximately $60 million in the first quarter 2010 to reduce deferred tax assets associated with retiree health care liabilities related to the Medicare Part D retiree drug subsidy.

Note 4 — Litigation and Environmental Matters

Abbott has been identified as a potentially responsible party for investigation and cleanup costs at a number of locations in the United States and Puerto Rico under federal and state remediation laws and is investigating potential contamination at a number of company-owned locations.  Abbott has recorded an estimated cleanup cost for each site for which management believes Abbott has a probable loss exposure.  No individual site cleanup exposure is expected to exceed $3 million, and the aggregate cleanup exposure is not expected to exceed $15 million.

There are a number of patent disputes with third parties who claim Abbott’s products infringe their patents.  In April 2007, New York University (NYU) and Centocor, Inc. filed a lawsuit in the Eastern District of Texas asserting that HUMIRA infringes a patent co-owned by NYU and Centocor and exclusively licensed to Centocor.  In June 2009, a jury found that Abbott had willfully infringed the patent and awarded NYU and Centocor approximately $1.67 billion in past compensatory damages.  In December 2009, the district court issued a final judgment and awarded the plaintiffs an additional $175 million in prejudgment interest.  On February 23, 2011, the Federal Circuit reversed the district court’s final judgment and found Centocor’s patent invalid.  On April 25, 2011, Centocor petitioned the Federal Circuit to rehear and reconsider the decision.  Abbott is confident in the merits of its case and as a result, no reserves have been recorded in this case.

Within the next year, legal proceedings may occur that may result in a change in the estimated reserves recorded by Abbott.  For its legal proceedings and environmental exposures Abbott estimates the range of possible loss to be from approximately $170 million to $215 million.  The recorded reserve balance at March 31, 2011 for these proceedings and exposures was approximately $195 million.  These reserves represent management’s best estimate of probable loss, as defined by FASB ASC No. 450, “Contingencies.”

While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations.

6

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

Note 5 — Post-Employment Benefits

Retirement plans consist of defined benefit, defined contribution, and medical and dental plans.  Net cost for the three months ended March 31 for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:

	Defined Benefit Plans						Medical and Dental Plans
(dollars in millions)	2011			2010			2011			2010
Service cost - benefits earned during the period	$	80		$	78		$	15		$	14
Interest cost on projected benefit obligations	113			117			24			26
Expected return on plans’ assets	(149		)	(149		)	(9		)	(7		)
Net amortization	44			28			2			6
Net cost	$	88		$	74		$	32		$	39

Abbott funds its domestic defined benefit plans according to IRS funding limitations.  International pension plans are funded according to similar regulations.  In the first quarters of 2011 and 2010, $288 million and $466 million, respectively, was contributed to defined benefit plans and $40 million and $66 million, respectively, was contributed to the post-employment medical and dental benefit plans.

Note 6 — Comprehensive Income, net of tax

	Three Months Ended March 31
(dollars in millions)	2011			2010
Foreign currency translation gain (loss) adjustments	$	1,617		$	(1,987	)
Amortization of net actuarial losses and prior service cost and credits	30			22
Unrealized gains (losses) on marketable equity securities	1			(2		)
Net adjustments for derivative instruments designated as cash flow hedges	(99		)	137
Other comprehensive income (loss), net of tax	1,549			(1,830		)
Net Earnings	864			1,003
Comprehensive Income (Loss)	$	2,413		$	(827	)

	March 31 2011			December 31 2010
Supplemental Accumulated Other Comprehensive Income Information, net of tax:
Cumulative foreign currency translation (gain) adjustments	$	(2,361	)	$	(744	)
Net actuarial losses and prior service cost and credits	2,190			2,220
Cumulative unrealized (gains) on marketable equity securities	(25		)	(24		)
Cumulative losses (gains) on derivative instruments designated as cash flow hedges	14			(85		)

7

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

Note 7 — Segment 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, four 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.

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.

	Three Months Ended March 31
	Net Sales to External Customers				Operating Earnings
(dollars in millions)	2011		2010		2011			2010
Proprietary Pharmaceutical Products	$	3,783	$	3,386	$	1,347		$	1,368
Established Pharmaceutical Products	1,295		717		304			158
Nutritional Products	1,423		1,320		155			188
Diagnostic Products	983		915		170			146
Vascular Products	845		747		226			182
Total Reportable Segments	8,329		7,085		2,202			2,042
Other	712		613
Net Sales	$	9,041	$	7,698
Corporate functions and benefit plans costs					(133		)	(120		)
Non-reportable segments					58			99
Net interest expense					(124		)	(89		)
Share-based compensation (a)					(176		)	(169		)
Acquired in-process research and development					(100		)	—
Other, net					(658		)	(441		)
Consolidated Earnings Before Taxes					$	1,069		$	1,322

(a)Approximately 40 to 45 percent of the annual net cost of share-based awards will typically be recognized in the first quarter due to the timing of the granting of share-based awards.

8

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

Note 8 — Incentive Stock Programs

In the first three months of 2011, Abbott granted 1,719,000 stock options, 118,411 replacement stock options, 1,153,670 restricted stock awards and 6,291,571 restricted stock units under these programs. At March 31, 2011, approximately 180 million shares were reserved for future grants. Information regarding the number of options outstanding and exercisable at March 31, 2011 is as follows:

	Outstanding		Exercisable
Number of shares	102,562,915		98,716,158
Weighted average remaining life (years)	4.9		4.7
Weighted average exercise price	$	50.37	$	50.36
Aggregate intrinsic value (in millions)	$	225	$	220

The total unrecognized share-based compensation cost at March 31, 2011 amounted to approximately $430 million which is expected to be recognized over the next three years.

Note 9 — Business Combinations and Technology Acquisitions

In February 2010, Abbott acquired Solvay’s pharmaceuticals business (Solvay Pharmaceuticals) for approximately $6.1 billion, in cash, plus additional payments of up to EUR 100 million per year if certain sales milestones are met in 2011, 2012 and 2013.  Contingent consideration of approximately $290 million was recorded.   The acquisition of Solvay Pharmaceuticals provides Abbott with a large and complementary portfolio of pharmaceutical products and expands Abbott’s presence in key global emerging markets.  Abbott acquired control of this business on February 15, 2010 and the financial results of the acquired operations are included in these financial statements beginning on that date.  The acquisition was funded with cash and short-term investments.  The allocation of the fair value of the acquisition is shown in the table below (in billions of dollars).

Goodwill, non-deductible	$	2.2
Acquired intangible assets, non-deductible	4.1
Acquired in-process research and development, non-deductible	0.5
Acquired net tangible assets	0.7
Deferred income taxes recorded at Acquisition	(1.1		)
Total allocation of fair value	$	6.4

Acquired intangible assets consist primarily of product rights for currently marketed products and are amortized over 2 to 14 years (average of 11 years).  Acquired in-process research and development projects are accounted for as indefinite lived intangible assets until regulatory approval or discontinuation.  The net tangible assets acquired consist primarily of trade accounts receivable of approximately $675 million, inventory of approximately $390 million, property and equipment of approximately $725 million, net of assumed liabilities, primarily trade accounts payable, accrued compensation and other liabilities.

Had the acquisition of Solvay Pharmaceuticals taken place on January 1, 2010, unaudited pro forma net sales, net earnings and diluted earnings per share for the first quarter 2010 would have been $8.3 billion, $1.0 billion and $0.63, respectively.  The pro forma information includes adjustments for amortization of intangible assets and fair value adjustments to acquisition-date inventory as well as acquisition and integration expenses.  The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date.

In March 2010, Abbott acquired STARLIMS Technologies for approximately $100 million, in cash, net of cash held by STARLIMS, providing Abbott with leading products and expertise to build its position in laboratory informatics.   A substantial portion of the fair value of the acquisition has been allocated to amortizable intangible assets and goodwill.

9

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

On September 8, 2010, Abbott acquired Piramal Healthcare Limited’s Healthcare Solutions business, a leader in the Indian branded generics market, for $2.2 billion, in cash, plus additional payments of $400 million annually in 2011, 2012, 2013 and 2014.  Abbott recorded a $1.6 billion liability for the present value of the additional payments at the acquisition date.  The acquisition was financed with cash.  The preliminary allocation of the fair value of the acquisition resulted in the recording of $2.7 billion of deductible acquired intangible assets and $1.0 billion of deductible goodwill.  Acquired intangible assets consist primarily of trade names, customer relationships and associated rights and are amortized over an average of 19 years.  The allocation of the fair value of the acquisition will be finalized when the valuation is completed.

In 2010, Abbott entered into an agreement to acquire licensing rights outside the U.S., excluding certain Asian markets, to a product in development for the treatment of chronic kidney disease.  In the first quarter of 2011, a certain milestone was achieved resulting in the recording of $100 million of acquired in-process research and development.

Note 10 — Financial Instruments, Derivatives and Fair Value Measures

Certain Abbott foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar.  These contracts, totaling $638 million and $1.3 billion at March 31, 2011 and December 31, 2010, respectively, are designated as cash flow hedges of the variability of the cash flows due to changes in foreign exchange rates and are recorded at fair value.  Accumulated gains and losses as of March 31, 2011 will be included in Cost of products sold at the time the products are sold, generally through the next twelve months.  The amount of hedge ineffectiveness was not significant in 2011 and 2010.

Abbott enters into foreign currency forward exchange contracts to manage currency exposures for foreign currency denominated third-party trade payables and receivables, and for intercompany loans and trade accounts payable where the receivable or payable is denominated in a currency other than the functional currency of the entity.  For intercompany loans, the contracts require Abbott to sell or buy foreign currencies, primarily European currencies and Japanese yen, in exchange for primarily U.S. dollars and other European currencies.  For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar, European currencies and Japanese yen.  At March 31, 2011 and December 31, 2010, Abbott held $13.4 billion and $10.8 billion, respectively, of such foreign currency forward exchange contracts.

Abbott has designated foreign denominated short-term debt as a hedge of the net investment in a foreign subsidiary of approximately $640 million and approximately $650 million as of March 31, 2011 and December 31, 2010, respectively.  Accordingly, changes in the fair value of this debt due to changes in exchange rates are recorded in Accumulated other comprehensive income (loss), net of tax.

Abbott is a party to interest rate swap contracts totaling $6.8 billion at March 31, 2011 and $7.3 billion at December 31, 2010 to manage its exposure to changes in the fair value of fixed-rate debt due 2011 through 2020.  These contracts are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates.  The effect of the hedge is to change a fixed-rate interest obligation to a variable rate for that portion of the debt.  Abbott records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.  No hedge ineffectiveness was recorded in income in 2011 or 2010 for these hedges.

10

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

The following table summarizes the amounts and location of certain derivative financial instruments as of March 31, 2011 and December 31, 2010:

	Fair Value - Assets					Fair Value - Liabilities
(dollars in millions)	March 31 2011		Dec. 31 2010		Balance Sheet Caption	March 31 2011		Dec. 31 2010		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	122	$	138	Deferred income taxes and other assets	$	48	$	36	Post-employment obligations, deferred income taxes and other long-term liabilities
Interest rate swaps designated as fair value hedges	—		8		Prepaid expenses, deferred income taxes, and other receivables	—		—		n/a
Foreign currency forward exchange contracts —
Hedging instruments Others not designated as hedges	— 100		16 109		Prepaid expenses, deferred income taxes, and other receivables	39 33		10 120		Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary	—		—		n/a	640		650		Short-term borrowings
	$	222	$	271		$	760	$	816

The following table summarizes the activity for foreign currency forward exchange contracts designated as cash flow hedges, debt designated as a hedge of net investment in a foreign subsidiary and the amounts and location of income (expense) and gain (loss) reclassified into income in the first three months of 2011 and 2010 and for certain other derivative financial instruments.  The amount of hedge ineffectiveness was not significant in 2011 and 2010 for these hedges.

	Gain (loss) Recognized in Other Comprehensive Income (loss)					Income (expense) and Gain (loss) Reclassified into Income
(dollars in millions)	2011			2010		2011			2010		Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	(22	)	$	27	$	57		$	—	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary	10			2		—			—		n/a
Interest rate swaps designated as fair value hedges	n/a			n/a		(36		)	76		Interest expense
Foreign currency forward exchange contracts not designated as a hedge	n/a			n/a		(101		)	14		Net foreign exchange loss (gain)

The interest rate swaps are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates.  The hedged debt is marked to market, offsetting the effect of marking the interest rate swaps to market.

11

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

The carrying values and fair values of certain financial instruments as of March 31, 2011 and December 31, 2010 are shown in the table below. The carrying values of all other financial instruments approximate their estimated fair values.  The counterparties to financial instruments consist of select major international financial institutions.  Abbott does not expect any losses from nonperformance by these counterparties.

	March 31 2011						December 31 2010
(dollars in millions)	Carrying Value			Fair Value			Carrying Value			Fair Value
Investment Securities:
Current	$	35		$	35		$	—		$	—
Long-term:
Equity securities	234			234			240			240
Debt obligations issued by various governments	156			133			62			43
Total Long-term Debt	(14,064		)	(14,978		)	(14,568		)	(15,723		)
Foreign Currency Forward Exchange Contracts:
Receivable position	100			100			125			125
(Payable) position	(72		)	(72		)	(130		)	(130		)
Interest Rate Hedge Contracts:
Receivable position	122			122			146			146
(Payable) position	(48		)	(48		)	(36		)	(36		)

The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis in the balance sheet:

			Basis of Fair Value Measurement
(dollars in millions)	Outstanding Balances		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
March 31, 2011:
Available for sale equity securities	$	81	$	81	$	—	$	—
Debt obligations issued by various governments	129		—		129		—
Interest rate swap derivative financial instruments	122		—		122		—
Foreign currency forward exchange contracts	100		—		100		—
Total Assets	$	432	$	81	$	351	$	—
Fair value of hedged long-term debt	$	6,940	$	—	$	6,940	$	—
Interest rate swap derivative financial instruments	48		—		48		—
Foreign currency forward exchange contracts	72		—		72		—
Contingent consideration related to business combinations	395		—		—		395
Total Liabilities	$	7,455	$	—	$	7,060	$	395
December 31, 2010:
Available for sale equity securities	$	75	$	75	$	—	$	—
Interest rate swap derivative financial instruments	146		—		146		—
Foreign currency forward exchange contracts	125		—		125		—
Total Assets	$	346	$	75	$	271	$	—
Fair value of hedged long-term debt	$	7,444	$	—	$	7,444	$	—
Interest rate swap derivative financial instruments	36		—		36		—
Foreign currency forward exchange contracts	130		—		130		—
Contingent consideration related to business combinations	365		—		—		365
Total Liabilities	$	7,975	$	—	$	7,610	$	365

The fair value of the debt was determined based on the face value of the debt adjusted for the fair value of the interest rate swaps, which is based on a discounted cash flow analysis.  The fair value of the contingent consideration was determined based on an independent appraisal adjusted for the time value of money and exchange.

12

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

Note 11 — Goodwill and Intangible Assets

Abbott recorded goodwill of approximately $2.2 billion in 2010 related to the acquisitions of Solvay Pharmaceuticals and STARLIMS Technologies.  In addition, in the first quarter of 2010, Abbott paid $250 million to Boston Scientific as a result of the approval to market the Xience V drug-eluting stent in Japan, resulting in an increase in goodwill. Goodwill related to the Solvay Pharmaceuticals acquisition was allocated to the Proprietary Pharmaceuticals Products and Established Pharmaceutical Products segments and goodwill related to the Boston Scientific payment was allocated to the Vascular Products segment. Foreign currency translation adjustments and other adjustments increased goodwill in the first three months of 2011 by approximately $700 million and decreased goodwill in the first three months of 2010 by approximately $600 million.  The amount of goodwill related to the pharmaceutical segments at March 31, 2011 was $10 billion and will be allocated to the Proprietary Products and Established Products segments using a relative fair value approach after additional analysis is completed. Goodwill was $208 million for the Nutritional Products segment, $383 million for the Diagnostic Products segment and $2.7 billion for the Vascular Products segment.  There were no reductions of goodwill relating to impairments or disposal of all or a portion of a business.

The gross amount of amortizable intangible assets, primarily product rights and technology was $17.6 billion as of March 31, 2011 and $17.3 billion as of December 31, 2010, and accumulated amortization was $6.9 billion as of March 31, 2011 and $6.5 billion as of December 31, 2010. Indefinite-lived intangible assets, which relate to in-process research and development acquired in a business combination, was approximately $1.5 billion and $1.4 billion at March 31, 2011 and December 31, 2010, respectively. The estimated annual amortization expense for intangible assets is approximately $1.6 billion in 2011, $1.3 billion in 2012, $1.2 billion in 2013, $925 million in 2014 and $812 million in 2015.  Amortizable intangible assets are amortized over 2 to 30 years (average 12 years).

Note 12 — Restructuring Plans

In 2011 and prior years, Abbott management approved plans to realign its worldwide pharmaceutical and vascular manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs. In the first three months of 2011, Abbott recorded $49 million to Cost of products sold, $18 million to Research and development and $49 million to Selling, general and administrative. Charges of $4 million and $3 million were recorded in the first three months of 2011 and 2010, respectively, relating to these restructurings, primarily for accelerated depreciation and product transfer costs. The following summarizes the activity for these restructurings: (dollars in millions)

	2011			2010
Accrued balance at January 1	$	77		$	145
Restructuring charges	116			—
Payments and other adjustments	(30		)	(31		)
Accrued balance at March 31	$	163		$	114

In the third quarter of 2010, Abbott management approved a restructuring plan primarily related to the acquisition of Solvay Pharmaceuticals.  This plan streamlines operations, improves efficiencies and reduces costs in certain Solvay sites and functions as well as in certain Abbott and Solvay commercial organizations in various countries.  Charges of approximately $44 million were recorded in the first three months of 2011 relating to this restructuring, primarily for accelerated depreciation.  Additional charges will occur through 2011 primarily related to additional employee-related and asset disposal costs.  The following summarizes the activity for this restructuring: (dollars in millions)

	2011
Accrued balance at January 1	$	410
Payments and other adjustments	(62		)
Accrued balance at March 31	$	348

13

Notes to Condensed Consolidated Financial Statements

March 31, 2011

(Unaudited), continued

In 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott’s core diagnostic business.  Charges of approximately $9 million and $14 million were recorded in the first three months of 2011 and 2010, respectively, relating to this restructuring, primarily for accelerated depreciation and product transfer costs.  Additional charges will occur through 2011 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines.  The following summarizes the activity for this restructuring: (dollars in millions)

	2011			2010
Accrued balance at January 1	$	88		$	98
Payments and other adjustments	(3		)	—
Accrued balance at March 31	$	85		$	98

14

FINANCIAL REVIEW

Results of Operations

The following table details sales by reportable segment for the three months ended March 31.  Percent changes are versus the prior year and are based on unrounded numbers.

	Net Sales to External Customers
(dollars in millions)	2011		Percent Change	2010
Proprietary Pharmaceutical Products	$	3,783	11.7	$	3,386
Established Pharmaceutical Products	1,295		80.7	717
Nutritional Products	1,423		7.8	1,320
Diagnostic Products	983		7.4	915
Vascular Products	845		13.1	747
Total Reportable Segments	8,329		17.5	7,085
Other	712		16.3	613
Net Sales	$	9,041	17.4	$	7,698
Total U.S.	$	3,517	8.1	$	3,253
Total International	$	5,524	24.3	$	4,445

The net sales growth in 2011 reflects unit growth, the acquisitions of Solvay’s pharmaceuticals business in February 2010 and Piramal Healthcare Limited’s Healthcare Solution business in September 2010 and the effect of exchange.  Excluding 1.3 percent of favorable exchange, net sales increased 16.1 percent in 2011.  The relatively weaker U.S. dollar increased first quarter 2011 Total International sales by 2.2 percent, increased Proprietary Pharmaceutical Products segment sales by 0.5 percent, increased Established Pharmaceutical Products segment sales by 2.9 percent, increased Nutritional Product segment sales by 2.0 percent, increased Diagnostic Products segment sales by 1.2 percent and increased Vascular Products segment sales by 1.6 percent over the first quarter of 2010.  Sales growth in the Established Pharmaceutical Products segment and in Total International sales was impacted by the acquisition of Solvay Pharmaceuticals in February 2010 and Piramal Healthcare Limited’s Healthcare solutions business in September 2010.

15

A comparison of significant product group sales for the three months ended March 31 is as follows.  Percent changes are versus the prior year and are based on unrounded numbers.

	Three Months Ended March 31
(dollars in millions)	2011		Percent Change		2010
Proprietary Pharmaceutical Products —
U.S. Proprietary	$	1,926	12.7		$	1,709
International Proprietary	1,857		10.7		1,678
Nutritional Products —
U.S. Pediatric Nutritionals	309		(0.1	)	309
International Pediatric Nutritionals	446		14.1		391
U.S. Adult Nutritionals	324		1.9		318
International Adult Nutritionals	340		18.2		288
Diagnostics —
Immunochemistry	752		6.7		705

The increase in U.S. Proprietary product sales in 2011 is due to the acquisition of Solvay Pharmaceuticals in February 2010 and to increased sales of HUMIRA and was partially offset by decreased sales of Zemplar.   International Proprietary product sales increased in 2011 due to increased sales of HUMIRA. U.S. Pediatric Nutritional sales in 2011 were affected by the voluntary recall of certain Similac-brand powder infant formulas, primarily in the U.S. in September 2010.  International Pediatric and Adult Nutritionals sales increased in 2011due primarily to volume growth in developing countries.  The relatively weaker U.S. dollar increased International Pediatric sales and International Adult Nutritional sales in 2011 by 3.9 percent each.

The gross profit margin was 57.3 percent for the first quarter 2011, compared to 56.7 percent for the first quarter 2010.  The increase in the gross profit margin in 2011 was due, in part, to improved margins in the diabetes and diagnostics businesses; partially offset by additional rebates under health care reform, the carryover effect of 2010 pharmaceutical pricing actions by European governments, and an unfavorable impact from foreign exchange rates.

Research and development expenses increased 27.4 percent in the first quarter 2011 over the first quarter 2010.  This increase reflects the acquisitions of Solvay Pharmaceuticals in February 2010 and Facet Biotech in April 2010. This increase also reflects continued pipeline spending, including programs in vascular devices, biologics, neuroscience, oncology and hepatitis C.  The majority of research and development expenditures are concentrated on pharmaceutical products.

Selling, general and administrative expenses for the first quarter 2011 increased 31.8 percent over the first quarter 2010.  Excluding charges relating to acquisition integration and restructurings, selling, general and administrative expenses in 2011 increased 26.5 percent.  This increase, exclusive of the charges relating to acquisition integration and restructurings, reflects the acquisitions of Solvay Pharmaceuticals in February of 2010 and Piramal Healthcare in September of 2010, higher 2011 provisions for litigation and the impact of the pharmaceutical fees associated with health care reform.   This increase also reflects increased selling and marketing support for new and existing products, including spending for HUMIRA and Xience V, and inflation.

16

Business Combinations and Technology Acquisitions

In February 2010, Abbott acquired Solvay’s pharmaceuticals business (Solvay Pharmaceuticals) for approximately $6.1 billion, in cash, plus additional payments of up to EUR 100 million per year if certain sales milestones are met in 2011, 2012 and 2013.  Contingent consideration of approximately $290 million was recorded.   The acquisition of Solvay Pharmaceuticals provides Abbott with a large and complementary portfolio of pharmaceutical products and expands Abbott’s presence in key global emerging markets.  Abbott acquired control of this business on February 15, 2010 and the financial results of the acquired operations are included in these financial statements beginning on that date.  The acquisition was funded with cash and short-term investments.  The allocation of the fair value of the acquisition is shown in the table below (in billions of dollars).

Goodwill, non-deductible	$	2.2
Acquired intangible assets, non-deductible	4.1
Acquired in-process research and development, non-deductible	0.5
Acquired net tangible assets	0.7
Deferred income taxes recorded at acquisition	(1.1		)
Total allocation of fair value	$	6.4

Acquired intangible assets consist primarily of product rights for currently marketed products and are amortized over 2 to 14 years (average of 11 years).  Acquired in-process research and development projects are accounted for as indefinite lived intangible assets until regulatory approval or discontinuation.  The net tangible assets acquired consist primarily of trade accounts receivable of approximately $675 million, inventory of approximately $390 million, property and equipment of approximately $725 million, net of assumed liabilities, primarily trade accounts payable, accrued compensation and other liabilities.

Had the acquisition of Solvay Pharmaceuticals taken place on January 1, 2010, unaudited pro forma net sales, net earnings and diluted earnings per share for the first quarter 2010 would have been $8.3 billion, $1.0 billion and $0.63, respectively.  The pro forma information includes adjustments for amortization of intangible assets and fair value adjustments to acquisition-date inventory as well as acquisition and integration expenses.  The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date.

In March 2010, Abbott acquired STARLIMS Technologies for approximately $100 million, in cash, net of cash held by STARLIMS, providing Abbott with leading products and expertise to build its position in laboratory informatics.   A substantial portion of the fair value of the acquisition has been allocated to amortizable intangible assets and goodwill.

On September 8, 2010, Abbott acquired Piramal Healthcare Limited’s Healthcare Solutions business, a leader in the Indian branded generics market, for $2.2 billion, in cash, plus additional payments of $400 million annually in 2011, 2012, 2013 and 2014.  Abbott recorded a $1.6 billion liability for the present value of the additional payments at the acquisition date.  The acquisition was financed with cash.  The preliminary allocation of the fair value of the acquisition resulted in the recording of $2.7 billion of deductible acquired intangible assets and $1.0 billion of deductible goodwill.  Acquired intangible assets consist primarily of trade names, customer relationships and associated rights and are amortized over an average of 19 years.  The allocation of the fair value of the acquisition will be finalized when the valuation is completed.

In 2010, Abbott entered into an agreement to acquire licensing rights outside the U.S., excluding certain Asian markets, to a product in development for the treatment of chronic kidney disease.  In the first quarter of 2011, a certain milestone was achieved resulting in the recording of $100 million of acquired in-process research and development.

17

Restructuring Plans

In 2011 and prior years, Abbott management approved plans to realign its worldwide pharmaceutical and vascular manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs.  In the first three months of 2011, Abbott recorded $49 million to Cost of products sold, $18 million to Research and development and $49 million to Selling, general and administrative.  Charges of $4 million and $3 million were recorded in the first three months of 2011 and 2010, respectively, relating to these restructurings, primarily for accelerated depreciation and product transfer costs.  The following summarizes the activity for these restructurings: (dollars in millions)

	2011			2010
Accrued balance at January 1	$	77		$	145
Restructuring charges	116			—
Payments and other adjustments	(30		)	(31		)
Accrued balance at March 31	$	163		$	114

In the third quarter of 2010, Abbott management approved a restructuring plan primarily related to the acquisition of Solvay Pharmaceuticals.  This plan streamlines operations, improves efficiencies and reduces costs in certain Solvay sites and functions as well as in certain Abbott and Solvay commercial organizations in various countries.  Charges of approximately $44 million were recorded in the first three months of 2011 relating to this restructuring, primarily for accelerated depreciation.  Additional charges will occur through 2011 primarily related to additional employee-related and asset disposal costs.  The following summarizes the activity for this restructuring: (dollars in millions)

	2011
Accrued balance at January 1	$	410
Payments and other adjustments	(62		)
Accrued balance at March 31	$	348

In 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott’s core diagnostic business.  Charges of approximately $9 million and $14 million were recorded in the first three months of 2011 and 2010, respectively, relating to this restructuring, primarily for accelerated depreciation and product transfer costs.  Additional charges will occur through 2011 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines.  The following summarizes the activity for this restructuring: (dollars in millions)

	2011			2010
Accrued balance at January 1	$	88		$	98
Payments and other adjustments	(3		)	—
Accrued balance at March 31	$	85		$	98

Interest Expense (Income)

Interest expense increased in the first quarter 2011 compared to 2010 due to a higher level of borrowing and interest income decreased in the first quarter 2011 compared to 2010 primarily as a result of lower investment levels.

18

Change in Accounting Principle, Other (income) expense, net and Net foreign exchange loss (gain)

Prior to January 1, 2011, the accounts of foreign subsidiaries were consolidated based on a fiscal year ended November 30 due to the time needed to consolidate these subsidiaries.  Effective January 1, 2011, the one month lag in the consolidation of the accounts of foreign subsidiaries was eliminated and the year-end of foreign subsidiaries was changed to December 31.  Abbott believes that the change in accounting principle related to the elimination of the one month reporting lag is preferable because it will result in more contemporaneous reporting of the results of foreign subsidiaries.  In accordance with applicable accounting literature, a change in subsidiaries’ year-end is treated as a change in accounting principle and requires retrospective application.  The cumulative effect of the change was an increase in retained earnings of $289 million as of January 1, 2009 and a corresponding decrease in other long-term liabilities.  The impact of the change was not material to the results of operations for the previously reported annual and interim periods after January 1, 2009, and thus, those results have not been revised.  A charge of $137 million was recorded to Other (income) expense, net in the three months ended March 31, 2011 to recognize the cumulative immaterial impacts to 2009 and 2010.  Had the financial statements been revised, net sales, operating earnings and net earnings in calendar 2009 would have increased by $211 million, $36 million and $38 million, respectively, and net sales, operating earnings and net earnings in calendar 2010 would have decreased by $21 million, $195 million and $175 million.  In addition, net sales, operating earnings and net earnings for the three months ended March 31, 2010 would have increased by $268 million, $33 million and $38 million, respectively, had the first quarter 2010 financial statements been revised.

Net foreign exchange loss (gain) in 2010 includes a charge of approximately $86 million for the impact of the devaluation of the bolivar currency in Venezuela on balance sheet translation.

Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the benefit of lower statutory tax rates and tax exemptions in several foreign taxing jurisdictions. 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 by up to $1.2 billion, including cash adjustments, within the next twelve months as a result of concluding various tax matters.  Additional cash payments as a result of concluding these various tax matters beyond what is already on deposit with the tax authorities is not expected to be material.  As a result of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act which were signed into law in the first quarter of 2010, Abbott recorded a charge of approximately $60 million in the first quarter 2010 to reduce deferred tax assets associated with retiree health care liabilities related to the Medicare Part D retiree drug subsidy.

Liquidity and Capital Resources March 31, 2011 Compared with December 31, 2010

Net cash from operating activities for the first three months 2011 totaled approximately $2.0 billion. Other, net in Net cash from operating activities for 2011 and 2010 includes the effects of contributions to defined benefit plans of $288 million and $466 million, respectively.  Abbott expects annual cash flow from operating activities to continue to exceed Abbott’s capital expenditures and cash dividends.

The acquisition of Solvay’s pharmaceuticals business was funded with cash and short-term investments.

Working capital was $6.4 billion at March 31, 2011 and $5.1 billion at December 31, 2010.

At March 31, 2011 Abbott’s long-term debt rating was AA by Standard & Poor’s Corporation and A1 by Moody’s Investors Service.  Abbott has readily available financial resources, including unused lines of credit of $6.7 billion that support commercial paper borrowing arrangements of which a $3.0 billion facility expires in October 2012 and a $3.7 billion facility expires in 2013.

19

Under a registration statement filed with the Securities and Exchange Commission in February 2009, Abbott issued $3.0 billion of long-term debt in the second quarter of 2010 that matures in 2015, 2020 and 2040 with interest rates of 2.7 percent, 4.125 percent and 5.3 percent, respectively.  Proceeds from this debt were used to pay down short-term borrowings.  In addition, Abbott repaid $500 million of long-term notes that were due in March of 2011 using primarily short-term borrowings.

In October 2008, the board of directors authorized the purchase of up to $5 billion of Abbott’s common shares from time to time and no shares were purchased under this authorization in the first three months of 2011.  In the first three months of 2010, 14.8 million shares were purchased under this authorization at a cost of approximately $800 million.

Legislative Issues

In the first quarter 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (collectively referred to herein as “health care reform legislation”) were signed into law in the U.S.  Health care reform legislation includes an increase in the basic Medicaid rebate rate from 15.1% to 23.1% and extends the rebate to drugs provided through Medicaid managed care organizations.  As a result, Abbott recorded an additional provision of approximately $60 million against gross sales in the first quarter 2010 for the impact of the rebate charges on first quarter sales as well as other products in the distribution channel.  In 2011, Abbott also began incurring additional rebates related to the Medicare Part D coverage gap “donut hole.”  These rebate changes will continue to have a negative effect on the gross profit margin of the Proprietary Pharmaceutical Products segment in future quarters.

Beginning in 2013, health care reform legislation will eliminate the federal income tax deduction for prescription drug expenses of retirees for which Abbott receives reimbursement under the Medicare Part D retiree drug subsidy program.  As a result, Abbott recorded a charge of approximately $60 million in the first quarter 2010 to reduce deferred tax assets associated with retiree health care liabilities.

In 2011, Abbott began recording the annual fee imposed by health care reform legislation on companies that sell branded prescription drugs to specified government programs.  The amount of the annual fee will be based on the ratio of certain of Abbott’s sales as compared to the total such sales of all covered entities multiplied by a fixed dollar amount specified in the legislation by year.  Beginning in 2013, Abbott will record the 2.3% excise tax imposed by health care reform legislation on the sale of certain medical devices.

Abbott’s primary markets are highly competitive and subject to substantial government regulations throughout the world.  Abbott expects debate to continue over the availability, method of delivery, and payment for health care products and services.  It is not possible to predict the extent to which Abbott or the health care industry in general might be adversely affected by these factors in the future.  A more complete discussion of these factors is contained in Item 1, Business, and Item 1A, Risk Factors, in the 2010 Annual Report on Form 10-K.

Private Securities Litigation Reform Act of 1995 — A Caution Concerning Forward-Looking Statements

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Abbott cautions investors that any forward-looking statements or projections made by Abbott, including those made in this document, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Economic, competitive, governmental, technological and other factors that may affect Abbott’s operations are discussed in Item 1A, Risk Factors, in the 2010 Annual Report on Form 10-K.

20

PART I.FINANCIAL INFORMATION

Item 4.Controls and Procedures

(a)Evaluation of disclosure controls and procedures.  The Chief Executive Officer, Miles D. White, and Chief Financial Officer, Thomas C. Freyman, evaluated the effectiveness of Abbott Laboratories’ disclosure controls and procedures as of the end of the period covered by this report, and concluded that Abbott Laboratories’ disclosure controls and procedures were effective to ensure that information Abbott is required to disclose in the reports that it files or submits with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by Abbott in the reports that it files or submits under the Exchange Act is accumulated and communicated to Abbott’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in internal control over financial reporting.  During the quarter ended March 31, 2011, there were no changes in Abbott’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, Abbott’s internal control over financial reporting.

PART II.OTHER INFORMATION

Item 1.Legal Proceedings

Abbott is involved in various claims, legal proceedings and investigations, including (as of March 31, 2011, except as otherwise indicated) those described below. While it is not feasible to predict the outcome of such pending claims, proceedings and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations.

In its 2010 Form 10-K, Abbott reported that a case is pending against Abbott in which New York University (NYU) and Centocor, Inc. assert that adalimumab (a drug Abbott sells under the trademark Humira®) infringes a patent co-owned by NYU and Centocor and exclusively licensed to Centocor. On February 23, 2011, the Federal Circuit reversed the district court’s final judgment issued in December 2009 and found Centocor’s patent invalid. On April 25, 2011, Centocor petitioned the Federal Circuit to rehear and reconsider the decision.

21

In its 2010 Form 10-K, Abbott reported that several lawsuits are pending in the United States District Court for the Northern District of California alleging that Abbott violated antitrust laws in connection with the 2003 Norvir re-pricing.  In March 2011, Abbott settled all class and individual claims brought on behalf of direct purchasers of Norvir in Meijer, Inc., Louisiana Wholesale Drug Company, Inc., Rochester Drug Co-Operative, Inc., Rite Aid, Inc., and Safeway, Inc.  In GlaxoSmithKline, a jury found in March 2011 that Abbott did not violate antitrust laws, but breached its license agreement with the plaintiff.  The jury awarded the plaintiff $3.4 million in damages.  The litigation related to Norvir is no longer material to Abbott and Abbott will no longer report on these cases.

In its 2010 Form 10-K, Abbott reported that Medinol Limited sued Abbott in the High Court of Ireland asserting that Abbott’s Vision, Xience V, Multi-Link 8 and Xience Prime stents infringe one of Medinol’s European stent design patents.  In March 2011, the court found that the asserted patent was not infringed by any of the Abbott stents.

In its 2010 Form 10-K, Abbott reported that lawsuits were pending in the United States District Court for the District of New Jersey in which Abbott and the patent owner, Laboratoires Fournier, S.A. (Fournier), alleged infringement of three patents relating to fenofibrate tablets (a drug Abbott sells under the trademark Tricor®) and sought injunctive relief against Biovail Laboratories International SRL and Biovail Corporation (collectively, Biovail) Lupin Pharmaceuticals, Inc. and Lupin Limited (collectively, Lupin), and Ranbaxy Laboratories Ltd., Ranbaxy Pharmaceuticals, Inc. and Ranbaxy Inc. (collectively, Ranbaxy). Abbott also reported that several other lawsuits were pending in that court involving its subsidiary, Fournier Laboratories Ireland Ltd. (Fournier Ireland) in which Fournier Ireland and joint patent owner Elan Pharma International Ltd. (Elan), alleged infringement of two jointly-owned patents and one Elan patent relating to fenofibrate tablets and sought injunctive relief against Biovail, Lupin and Ranbaxy. During the first quarter of 2011, these cases were settled and dismissed; the Ranbaxy cases in February and the Biovail and Lupin cases in March.

22

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(c)   Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1, 2011 – January 31, 2011	186,170	(1)	$	47.875	0	$	3,392,180,505	(2)
February 1, 2011 – February 28, 2011	174,337	(1)	$	46.139	0	$	3,392,180,505	(2)
March 1, 2011 – March 31, 2011	43,802	(1)	$	47.586	0	$	3,392,180,505	(2)
Total	404,309	(1)	$	47.095	0	$	3,392,180,505	(2)

(1)These shares include:

(i)the shares deemed surrendered to Abbott to pay the exercise price in connection with the exercise of employee stock options - 186,170 in January, 151,337 in February, and 20,802 in March; and

(ii)the shares purchased on the open market for the benefit of participants in the Abbott Laboratories, Limited Employee Stock Purchase Plan - 0 in January, 23,000 in February, and 23,000 in March.

These shares do not include the shares surrendered to Abbott to satisfy tax withholding obligations in connection with the vesting of restricted stock or restricted stock units.

(2)On October 13, 2008, Abbott announced that its board of directors approved the purchase of up to $5 billion of its common shares, from time to time.

23

Item 6.        Exhibits

Incorporated by reference to the Exhibit Index included herewith.

24

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ABBOTT LABORATORIES
	By:	/s/ Thomas C. Freyman
		Thomas C. Freyman,
		Executive Vice President,
		Finance and Chief Financial Officer
Date: May 6, 2011

25

EXHIBIT INDEX

Exhibit No.	Exhibit
2	Amendment No. 2 to Business Transfer Agreement dated January 29, 2011, by and among Abbott Healthcare Private Limited, Abbott Laboratories, Piramal Healthcare Limited (“Piramal”) and certain shareholders of Piramal.
3	*By-laws of Abbott Laboratories, as amended and restated, effective as of April 29, 2011, filed as Exhibit 3.1 to the Abbott Laboratories Current Report on Form 8-K dated February 18, 2011.
12	Statement re: computation of ratio of earnings to fixed charges.
18	Preferability letter from Deloitte & Touche LLP regarding a change in accounting principle dated May 6, 2011.
31.1	Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).
31.2	Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).
Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be “filed” under the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements and notes from the Abbott Laboratories Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed on May 6, 2011, formatted in XBRL: (i)  Condensed Consolidated Statement of Earnings; (ii) Condensed Consolidated Statement of Cash Flows; (iii) Condensed Consolidated Balance Sheet; and (iv) the notes to the condensed consolidated financial statements.

*              Incorporated herein by reference.  Commission file number 1-2189.

26

EX-2

Exhibit 2

AMENDMENT NO. 2

TO

BUSINESS TRANSFER AGREEMENT

This Amendment No. 2 to Business Transfer Agreement (this “Second Amendment”), made as of January 29, 2011, is entered into by and among Abbott Healthcare Private Limited, a private limited company formed under the Laws of India and having its registered office at 4, Corporate Park, Sion Trombay Road, Mumbai-400 071, Maharashtra, India (“Purchaser”), and solely for the purposes of Section 7.18 of the BTA (as defined herein), Abbott Laboratories, an Illinois corporation and the indirect ultimate corporate parent of Purchaser (the “Guarantor”), on the one hand, and Piramal Healthcare Limited, a public limited company formed under the Laws of India and having its registered office at Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013, Maharashtra, India and listed on the Bombay and National stock exchanges (“Seller”), and, solely for purposes of Sections 7.5(c), 7.6, 10.6 and 11.12 of the BTA, the shareholders of Seller listed on Exhibit A of the BTA who, as of December 31, 2009, held, in the aggregate, 103,232,499 shares of Seller, which represented approximately 49.39% of the issued and outstanding share capital of Seller (“Promoter Group”), on the other hand.

RECITALS

WHEREAS, the Parties have entered into that certain Business Transfer Agreement, made as of May, 21, 2010 (as amended from time to time, including that certain Amendment No. 1 to Business Transfer Agreement, dated September 8, 2010, the “BTA”);

WHEREAS, Seller has requested that Exhibit I to the BTA be amended to include certain additional finished products manufactured by Seller for third parties at its Pithampur facility; and

WHEREAS, the Parties hereto now desire to amend the BTA in accordance with Section 15.3 of the BTA as hereinafter provided.

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

AGREEMENT

1.Amended Exhibit I.

(a)           Exhibit I to the BTA is hereby amended and restated in its entirety in the form set forth on Exhibit 1 to this Second Amendment.

(b)Seller represents and warrants to Purchaser as of the date of this Second Amendment as follows:

(i) Seller manufactures each of the finished pharmaceutical products Carvedilol, Sertraline and Amlodipine (in the respective administration mode and dosage forms set forth on Exhibit I) only for Teva Pharmaceutical Products Ltd (“Teva”) or Teva’s Affiliates (and not for any other Person) at Seller’s Pithampur facility pursuant to the terms of that certain Manufacturing Agreement by and between Seller and Teva, dated December 24, 2008 (the “Teva Agreement”), despite no Joinder Agreement (as defined in the Teva Agreement) having been executed by any IP Holder (as defined in the Teva Agreement) in connection therewith;

(ii) Seller manufactures the finished pharmaceutical product Carisoprodol (in the administration mode and dosage forms set forth on Exhibit I) only for Vision Pharma, LLC (“Vision”) (and not for any other Person) at Seller’s Pithampur facility pursuant to the terms of that certain Contract Manufacturing Agreement entered into effective as of September 1, 2009 by and between Seller and Vision (the “Vision Agreement”); and

(iii)  Seller manufactures the finished pharmaceutical product Glycopyrrolate (in the administration mode and dosage forms set forth on Exhibit I) only for Northstar International Distribution Limited (“Northstar”) (and not for any other Person) at Seller’s Pithampur facility pursuant to the terms of that certain Contract Manufacturing Agreement entered into as of October 29, 2004, by and between Seller and Northstar (formerly McKesson International Distribution Limited) (the “Northstar Agreement”), notwithstanding that Schedule 1 of the Northstar Agreement does not include Glycopyrrolate.

(c)           Seller hereby agrees and acknowledges that, if at any time following the date of this Second Amendment: (i) there is any inaccuracy in or breach of any representation or warranty set forth in Section 1(b) of this Second Amendment with respect to the applicable finished pharmaceutical product manufactured by Seller; or (ii) the definition of “Territory” in (A) the Teva Agreement is modified to include any country other than the United States (including its territories and possessions) and Canada; or (B) the Vision Agreement or the Northstar Agreement is modified to include any country other than the United States; then, unless Purchaser agrees otherwise in writing, the applicable finished pharmaceutical product manufactured by Seller shall be deemed automatically excluded from Exhibit I.

2.             No Implied Amendments; Effective Date.  Except as amended herein, all terms and provisions contained in the BTA shall remain in full force and effect.  Each of the Parties agrees that the amendments to the BTA contained herein shall be effective upon the execution of this Second Amendment by each Party.  On and after the date hereof, each reference in the BTA to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the BTA shall mean the BTA as amended by this Second Amendment.

3.             Counterparts.  This Second Amendment may be executed in multiple counterparts, each of which when so executed and delivered shall be deemed an original but all of which together shall constitute one and the same instrument and any Party may execute this Second Amendment by signing any one or more of such originals or counterparts.  The delivery of signed counterparts by facsimile or email transmission that includes a “portable document format” (“.pdf”) of the sending Party’s signature(s) is as effective as signing and delivering the counterpart in person.

4.             Defined Terms.  Capitalized terms used herein that are not otherwise defined shall have the meanings set forth in the BTA.

5.             Governing Law.  The internal Laws of India (without giving effect to any choice or conflict of law provision or rule (whether of India or any other jurisdiction) that would cause the application of Laws of any other jurisdiction) govern all matters arising out of or relating to this Second Amendment and all of the transactions it contemplates, including its validity, interpretation, construction, performance and enforcement and any disputes or controversies arising therefrom or related thereto.

6.             Arbitration.  Except for any claims for specific performance or interlocutory relief which may be heard in the High Court of Judicature at Bombay, India, all controversies, disputes or claims arising out of or relating in any way to this Second Amendment or the transactions contemplated hereunder, including any dispute as to the existence, validity, performance, breach or termination hereof, shall be resolved by final and binding arbitration under the Rules of Arbitration of the International Chamber of Commerce which rules shall be deemed to be incorporated into this Second Amendment, as modified by the provisions set forth on Schedule 14.2 of the BTA.

[SIGNATURES TO FOLLOW]

IT WITNESS WHEREOF, the Parties hereto have caused this Second Amendment to be executed by their respective duly authorized representatives as of the date first written above.

ABBOTT HEALTHCARE PRIVATE
LIMITED
By:	/s/ Michael J. Warmuth
	Name:	Michael J. Warmuth
	Title:	Authorized Signatory
ABBOTT LABORATORIES
By:	/s/ Michael J. Warmuth
	Name:	Michael J. Warmuth
	Title:	Senior Vice President
		Established Products Division
PIRAMAL HEALTHCARE LIMITED
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal
	Title:	Chairman & Authorised Signatory
AJAY G. PIRAMAL
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal
AJAY G. PIRAMAL (HUF)
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal

SWATI A. PIRAMAL
By:	/s/ Swati A. Piramal
	Name:	Swati A. Piramal
NANDINI A. PIRAMAL
By:	/s/ Nandini A. Piramal
	Name:	Nandini A. Piramal
ANAND AJAY PIRAMAL
By:	/s/ Anand Ajay Piramal
	Name:	Anand Ajay Piramal
LALITA G. PIRAMAL
By:	/s/ Lalita G. Piramal
	Name:	Lalita G. Piramal
THE AJAY G. PIRAMAL FOUNDATION
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal
	Title:	Authorised Signatory

NANDINI PIRAMAL INVESTMENTS
PRIVATE LIMITED
By:	/s/ Nandini A. Piramal
	Name:	Nandini A. Piramal
	Title:	Authorised Signatory
PHL HOLDINGS PRIVATE LIMITED
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal
	Title:	Authorised Signatory
PIRAMAL ENTERPRISES LIMITED
TRUSTEE OF THE PIRAMAL
ENTERPRISES EXECUTIVE TRUST
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal
	Title:	Authorised Signatory
SAVOY FINANCE & INVESTMENTS
PRIVATE LIMITED
By:	/s/ Nandini A. Piramal
	Name:	Nandini A. Piramal
	Title:	Authorised Signatory
SWASTIK SAFE DEPOSIT AND
INVESTMENTS LTD
By:	/s/ Nandini A. Piramal
	Name:	Nandini A. Piramal
	Title:	Authorised Signatory

PIRAMAL HEALTHCARE LIMITED —
SENIOR EMPLOYEE OPTION SCHEME
By:	/s/ Ajay G. Piramal
	Name:	Ajay G. Piramal
	Title:	Authorised Signatory

EXHIBIT 1 *

* Pursuant to Item 601(b)(2) of Regulation S-K, all exhibits and schedules listed herein have been omitted. Abbott Laboratories agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon request.

EX-12

Exhibit 12

Abbott Laboratories

Computation of Ratio of Earnings to Fixed Charges

(Unaudited)

(dollars in millions)

	ThreeMonths Ended
	March 31, 2011
Net Earnings	$	864
Add (deduct):
Taxes on earnings	205
Noncontrolling interests	1
Earnings from Operations, as adjusted	1,070
Fixed Charges:
Interest on long-term and short-term debt	146
Capitalized interest cost	5
Rental expense representative of an interest factor	29
Total Fixed Charges	180
Total adjusted earnings available for payment of fixed charges	$	1,250
Ratio of earnings to fixed charges	6.9

NOTE:    For the purpose of calculating this ratio, (i) earnings have been calculated by adjusting earnings for taxes on earnings; interest expense; capitalized interest cost, net of amortization; noncontrolling interests; and the portion of rentals representative of the interest factor, (ii) Abbott considers one-third of rental expense to be the amount representing return on capital, and (iii) fixed charges comprise total interest expense, including capitalized interest and such portion of rentals.

EX-18

Exhibit 18

PREFERABILITY LETTER OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

May 6, 2011

Board of Directors and Shareholders

Abbott Laboratories
100 Abbott Park Road
Abbott Park, IL 60064
USA

To the Board of Directors and Shareholders of Abbott Laboratories (the “Company”):

At your request, we have read the description included in your Quarterly Report on Form 10-Q to the Securities and Exchange Commission for the quarter ended March 31, 2011, of the facts relating to a change in accounting principle related to the elimination of the one-month reporting lag for international subsidiaries.  We believe, on the basis of the facts so set forth and other information furnished to us by appropriate officials of the Company, that the accounting change described in your Form 10-Q is to an alternative accounting principle that is preferable under the circumstances.

We have not audited any consolidated financial statements of Abbott Laboratories and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 2010.  Therefore, we are unable to express, and we do not express, an opinion on the facts set forth in the above-mentioned Form 10-Q, on the related information furnished to us by officials of the Company, or on the financial position, results of operations, or cash flows of Abbott Laboratories and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 2010.

Yours truly,

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))

I, Miles D. White, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Abbott Laboratories;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Abbott as of, and for, the periods presented in this report;

4.Abbott’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Abbott and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Abbott, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of Abbott’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in Abbott’s internal control over financial reporting that occurred during Abbott’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Abbott’s internal control over financial reporting; and

5.Abbott’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Abbott’s auditors and the audit committee of Abbott’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Abbott’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in Abbott’s internal control over financial reporting.

Date:  May 6, 2011	/s/ Miles D. White
	Miles D. White, Chairman of the Board
	and Chief Executive Officer

2

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))

I, Thomas C. Freyman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Abbott Laboratories;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Abbott as of, and for, the periods presented in this report;

4.Abbott’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Abbott and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Abbott, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of Abbott’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in Abbott’s internal control over financial reporting that occurred during Abbott’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Abbott’s internal control over financial reporting; and

5.Abbott’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Abbott’s auditors and the audit committee of Abbott’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Abbott’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in Abbott’s internal control over financial reporting.

Date:  May 6, 2011	/s/ Thomas C. Freyman
	Thomas C. Freyman, Executive Vice President,
	Finance and Chief Financial Officer

2

EX-32.1

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Abbott Laboratories (the “Company”) on Form 10-Q for the period ended March 31, 2011 as filed with the Securities and Exchange Commission (the “Report”), I, Miles D. White, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Miles D. White

Miles D. White

Chairman of the Board and

Chief Executive Officer

May 6, 2011

A signed original of this written statement required by Section 906 has been provided to Abbott Laboratories and will be retained by Abbott Laboratories and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant To

18 U.S.C. Section 1350

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Abbott Laboratories (the “Company”) on Form 10-Q for the period ended March 31, 2011 as filed with the Securities and Exchange Commission (the “Report”), I, Thomas C. Freyman, Executive Vice President, Finance and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas C. Freyman

Thomas C. Freyman

Executive Vice President, Finance

and Chief Financial Officer

May 6, 2011

A signed original of this written statement required by Section 906 has been provided to Abbott Laboratories and will be retained by Abbott Laboratories and furnished to the Securities and Exchange Commission or its staff upon request.