  Broad-based health care company that discovers, develops, manufactures, and markets products and services Abbott's main businesses: ◦ Global pharmaceuticals  Oncology, Immunology ◦ Medical products  Vision Care, Cardiovascular, Diabetes  Pays a dividend of $1.92 (3.60%)  Has increased for 38 consecutive years  Customers  Retailers, wholesalers, hospitals, and healthcare facilities  Competitors  Johnson & Johnson, Pfizer Inc., Baxter International Inc.  Purchase Price= $46.83 (12/9/10)  Recent Price= (11/9/2011)         $52.94 Shares Held= 40 $ Gain/Loss= $244.40 Current Value= $2117.60 FV Estimate (Morningstar) = $68.00 FV Estimate (IMP)= $103.68 1yr Target Est.= $59.37        52 week range= $45.07-55.61 Market Cap= $82.50 Billion Projected Div Yield= 3.60% P/E= 18.4 Net Profit Margin 5yr= 14.20% ROA 5yr= 9.50% ROE 5yr= 22.56% Interest Coverage= 14.31 Financial Leverage= 2.66     Sales in 2010 increased more than 14 percent over 2009. Cash Flow increased $1.4 billions dollars from the previous year. Returned $2.7 billions dollars back to shareholders. Invested over $3.7 dollars into R&D. ◦ Strong Leadership (Tenure) ◦ Diversification     Medical Products Portfolio Pharmaceutical Product Portfolio (Patent Protected) Nutritional Product Portfolio Diagnostics ◦ Leader in markets and Market share:  Autoimmune diseases, HIV, testosterone replacement, diabetes and vascular markets. ◦ Innovation  Expect to continue creating new products and technology ◦ Global Presence  Pharmaceutical Operations depends heavily on Humira and Xience for future growth.  Humira (Autoimmune), Kaletra (HIV/AIDS), and Tricor and Trilipix count for 27% of total sales.   Competitors are well branded. Rely on rapid product innovation.  Fierce competition from industry  Geographic expansions into new markets (China, India, Russia)  Emerging markets are expected to grow at three times the rate of developed markets.  Population growth, rising incomes, modernization of healthcare systems, and increased focus on the treatment of chronic diseases.  Acquisitions  Acquired Solvay Pharmaceuticals, bringing approximately $2 billion in stable, branded generic sales.  Acquired Piramal’s Healthcare Solutions business, making Abbott the largest pharmaceutical company in India, an $8 billion market expected to double in the next five years  International nutritional products business has more than doubled its sales since 2005.  Expect to more than double emerging market sales within the next five years.  Aggressive cost cutting measures could create higher profit margins.  Litigation:  Legislative Issues: ◦ Clean Up Suits ◦ Patient Disputes ◦ Health Care Reform Legislation will have a negative impact on profits.  Increased Rebates  Elimination of 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.  Splitting of the company could reverse cost synergies such as increasing duplicative areas of operations.    On October 19, 2010, Abbott announced that it planned on separating into two publicly traded companies. ◦ Research-Based Pharmaceutical Company  Annual Sales: Nearly $18 Billion (based on 2011 estimates) ◦ Diversified Medical Products Company (Abbott)  Annual Sales: Approximately $22 Billion (based on 2011 estimates) The transaction is intended to take the form of a tax-free distribution to Abbott shareholders. The expected stock distribution ratio will be determined at a future date.  The transaction is expected to be completed by the end of next year. ◦ Subject to the final approval of:  Abbott board of directors  The Internal Revenue Service  Securities and Exchange Commission.  Recommendations ◦ ◦ ◦ ◦ ◦ Strong Buy Buy Hold Underperform Sell (Yahoo Finance) = = = = = 3 9 11 0 1  I think we should HOLD Abbot due to: ◦ ◦ ◦ ◦ ◦ ◦ Strong position in emerging markets Well diversified business operations Strong leadership Strong Financials High Paying Dividend Stock Good Future Outlook