Abbott Reports Strong Fourth-Quarter Results and Record Operating Cash Flow in 2006

- Sales Growth of 14.5 Percent in the Fourth Quarter, as Adjusted -

ABBOTT PARK, Ill., January 24, 2007 /PRNewswire-FirstCall/ -- Abbott today announced financial results for the fourth quarter and full year ended Dec. 31, 2006.

    --  Abbott's earnings per share, excluding specified items, for the fourth

        quarter were $0.75, at the high end of the company's previous guidance

        range of $0.73 to $0.75.  Diluted earnings per share under U.S.

        Generally Accepted Accounting Principles (GAAP) were a loss of

        ($0.31), which contains acquisition-related costs, including acquired

        in-process research and development of $0.82 per share from the Kos

        acquisition.


    --  In the fourth quarter, worldwide sales increased 14.5 percent,

        adjusting both periods for the amendment of the Boehringer Ingelheim

        (BI) distribution agreement and including a favorable 1.5 percent

        effect of exchange rates.  Reported worldwide sales were $6.2 billion,

        up 2.8 percent.


    --  U.S. pharmaceutical sales increased 9.9 percent in the quarter,

        adjusting both periods for the BI amendment, driven by continued

        success in HUMIRA, which achieved full-year worldwide sales of more

        than $2 billion.  U.S. pharmaceutical sales, as reported, decreased

        18.2 percent, reflecting the BI impact.


    --  Medical Products sales increased 22.7 percent, including $389 million

        from Abbott Vascular and double-digit growth in International

        Nutritionals and Abbott Molecular.


    --  Operating cash flow reached a record $5.3 billion in 2006.


    --  The company expects 2007 global sales of HUMIRA to exceed

        $2.7 billion.


"2006 was a highly productive and successful year for Abbott," said Miles D. White, chairman and chief executive officer, Abbott. "We completed several major transformational changes that significantly strengthened the mix of our broad-based portfolio as well as the diversity of our strong cash flows. The strategic actions we've taken over the last seven to eight years have positioned Abbott for higher growth and consistent double-digit earnings performance."

The following is a summary of fourth-quarter 2006 sales for each of Abbott's major operating divisions.



    Sales Summary -                                        % Change  Impact of

     Quarter Ended 12/31/06                                  of all   Exchange

                                        4Q06      % Change   non-BI     on %

                                    ($ millions)  vs. 4Q05  Products   Change

    Total Sales                         $6,218       2.8       14.5      1.5


      Total U.S. Sales                  $3,256      (6.5)      13.7     ---


      Total International Sales         $2,962      15.5                3.6


    Worldwide Pharmaceutical Sales      $3,537      (8.2)       9.4     1.4


      U.S. Pharmaceuticals              $1,978     (18.2)       9.9     ---


      International

       Pharmaceuticals (AI)             $1,559       8.8                3.8


    Worldwide Nutritional Sales         $1,067       9.3                1.2


      U.S. Nutritionals (Ross)            $624       2.8                ---


      International

       Nutritionals (ANI)                 $443      19.9                3.2


    Worldwide Diagnostics Sales         $1,052       6.4                2.5


      U.S. Diagnostics                    $342       6.3                ---


      International Diagnostics           $710       6.5                3.7


    Worldwide Vascular Sales              $389     406.4(a)             1.7


      U.S. Vascular                       $224     384.1(a)             ---


      International Vascular              $165     440.2(a)             4.3



     (a)  Includes the impact of the Guidant vascular acquisition.


     Note:  See "Consolidated Statement of Earnings" for more information.




    The following is a summary of 2006 sales for each of Abbott's major

operating divisions.


    Sales Summary -                                        % Change  Impact of

     Year Ended 12/31/06                                     of all   Exchange

                                         FY06     % Change   non-BI     on %

                                    ($ millions)  vs. FY05  Products   Change


    Total Sales                        $22,476       0.6       11.6    (0.2)


      Total U.S. Sales                 $11,534      (7.5)      12.3     ---


      Total International Sales        $10,942      10.9               (0.5)


    Worldwide Pharmaceutical Sales     $12,395      (9.5)       7.8    (0.3)


      U.S. Pharmaceuticals              $6,550     (19.5)      10.1     ---


      International

       Pharmaceuticals (AI)             $5,845       5.3               (0.7)


    Worldwide Nutritional Sales         $4,313       9.6                0.3


      U.S. Nutritionals (Ross)          $2,629       4.2                ---


      International

       Nutritionals (ANI)               $1,684      19.1                0.8


    Worldwide Diagnostics Sales         $3,979       5.9               (0.5)


      U.S. Diagnostics                  $1,346       7.5                ---


      International Diagnostics         $2,633       5.1               (0.7)


    Worldwide Vascular Sales            $1,082     327.7(a)            (0.9)


      U.S. Vascular                       $647     359.2(a)             ---


      International Vascular              $435     288.0(a)            (1.9)



     (a)  Includes the impact of the Guidant vascular acquisition.


     Note:  See "Consolidated Statement of Earnings" for more information.



The following is a summary of Abbott's fourth-quarter 2006 sales for selected products.

    Quarter Ended 12/31/06         Percent          Percent           Percent

    (dollars in millions)    U.S.   Change  Rest of  Change   Global   Change

                            Sales  vs. 4Q05  World  vs. 4Q05   Sales  vs. 4Q05

    Pharmaceutical Products

    HUMIRA                   $370    31.0    $250    57.6 (a)    $620   40.6

    Depakote                 $384    14.9     $21    21.6        $405   15.2

    TriCor                   $326     4.3     ---     ---        $326    4.3

    Kaletra                  $138    10.8    $159     7.7 (b)    $297    9.1

    Omnicef                  $259    36.9     ---     ---        $259   36.9

    Biaxin (clarithromycin)   $56   (40.0)   $179    (4.7)(c)    $235  (16.4)

    Ultane/Sevorane           $58   (36.4)   $137    (3.8)(d)    $195  (16.5)

    Synthroid                $115   (18.7)    $17    14.5        $132  (15.5)

    Leuprolide                ---     ---     $61    13.6 (e)     $61   13.6

    Lansoprazole              ---     ---     $46    11.4 (f)     $46   11.4


    Medical Products

    Pediatric Nutritionals   $294    14.7    $231    24.7        $525   18.9

    Adult Nutritionals       $263     2.2    $212    15.1        $475    7.5

    Abbott Diabetes Care     $135    (2.1)   $155     4.9 (g)    $290    1.5


    TAP Pharmaceutical

     Products

    (not consolidated in

     Abbott's sales)

    Prevacid                 $709    12.1     ---     ---        $709   12.1

    Lupron                   $164    (5.5)    ---     ---        $164   (5.5)



     (a) Without the positive impact of exchange of 8.5 percent, HUMIRA sales

         increased 49.1 percent internationally.

     (b) Without the positive impact of exchange of 4.7 percent, Kaletra sales

         increased 3.0 percent internationally.

     (c) Without the positive impact of exchange of 3.2 percent,

         clarithromycin sales decreased 7.9 percent internationally.

     (d) Without the positive impact of exchange of 2.9 percent, Sevorane

         sales decreased 6.7 percent internationally.

     (e) Without the positive impact of exchange of 4.0 percent, leuprolide

         sales increased 9.6 percent internationally.

     (f) Without the positive impact of exchange of 4.0 percent, lansoprazole

         sales increased 7.4 percent internationally.

     (g) Without the positive impact of exchange of 4.6 percent, Abbott

         Diabetes Care sales increased 0.3 percent internationally.




    The following is a summary of sales for the full-year 2006 for selected

products.



    Year Ended 12/31/06            Percent          Percent           Percent

    (dollars in millions)    U.S.   Change  Rest of  Change   Global   Change

                            Sales  vs. FY05  World  vs. FY05   Sales  vs. FY05

    Pharmaceutical Products

    HUMIRA                 $1,176    38.4    $868    57.6      $2,044   45.9

    Depakote               $1,230    18.5     $78    24.8      $1,308   18.9

    Kaletra                  $512    22.0    $623     6.5 (a)  $1,135   13.0

    TriCor                 $1,048    13.1     ---     ---      $1,048   13.1

    Biaxin (clarithromycin)  $151   (50.5)   $665   (12.5)(b)    $816  (23.4)

    Ultane/Sevorane          $260   (22.5)   $539     0.2 (c)    $799   (8.6)

    Omnicef                  $637    28.6     ---     ---        $637   28.6

    Synthroid                $470    (5.7)    $64    14.5        $534   (3.6)

    Leuprolide                ---     ---    $230     4.6 (d)    $230    4.6

    Lansoprazole              ---     ---    $173    12.3 (e)    $173   12.3


    Medical Products

    Pediatric Nutritionals $1,128     2.7    $898    28.7      $2,026   12.8

    Adult Nutritionals     $1,097     1.9    $785     9.7      $1,882    5.0

    Abbott Diabetes Care     $547     4.8    $589     8.2 (f)  $1,136    6.5


    TAP Pharmaceutical

     Products

    (not consolidated in

     Abbott's sales)

    Prevacid               $2,600     4.0     ---     ---      $2,600    4.0

    Lupron                   $662    (5.2)    ---     ---        $662   (5.2)



     (a) Without the negative impact of exchange of 0.4 percent, Kaletra sales

         increased 6.9 percent internationally.

     (b) Without the negative impact of exchange of 1.6 percent,

         clarithromycin sales decreased 10.9 percent internationally.

     (c) Without the negative impact of exchange of 1.0 percent, Sevorane

         sales increased 1.2 percent internationally.

     (d) Without the positive impact of exchange of 0.4 percent, leuprolide

         sales increased 4.2 percent internationally.

     (e) Without the positive impact of exchange of 6.1 percent, lansoprazole

         sales increased 6.2 percent internationally.

     (f) Without the negative impact of exchange of 0.3 percent, Abbott

         Diabetes Care sales increased 8.5 percent internationally.




    Business Highlights


    --  FreeStyle(R) Freedom(TM) Approval -- In March, Abbott received U.S.

        Food and Drug Administration (FDA) regulatory approval to market

        FreeStyle Freedom, a blood glucose monitoring system with a five-

        second average testing time and a large, easy-to-read display.

        FreeStyle Freedom offers virtually pain-free testing, using a blood

        sample size of 0.3 microliter, the smallest sample size required of

        any blood glucose monitoring product on the market.


    --  Guidant Vascular Acquisition -- In April, Abbott completed its

        acquisition of Guidant's vascular business, creating a leading global

        vascular device business with a broad product portfolio, innovative

        research and development programs, and leading manufacturing and

        commercial operations.


    --  HUMIRA(R) Ankylosing Spondylitis (AS) Approval -- Abbott received U.S.

        and European approval for HUMIRA to treat AS, the third disease state

        indication for HUMIRA.  Ankylosing spondylitis is a chronic disease

        that causes inflammatory back pain and stiffness.


    --  Kaletra(R) Tablets Approval -- The European Commission approved the

        tablet formulation of Kaletra, Abbott's leading HIV protease

        inhibitor.  Approved in the United States in 2005 and developed using

        proprietary Meltrex(TM) melt-extrusion technology, Kaletra tablets

        offer patients improved convenience over the capsule formulation,

        including a reduced pill count, no refrigeration requirements and the

        ability to take Kaletra with or without food.


    --  Global Regulatory Submission for HUMIRA in Crohn's Disease -- In

        September, Abbott submitted HUMIRA for U.S. and European regulatory

        approval to treat Crohn's disease, a chronic inflammatory disease of

        the gastrointestinal tract.  Abbott's U.S. submission was granted

        6-month Priority Review status by the FDA.  Crohn's disease is the

        fourth autoimmune disease submitted for regulatory approval for

        HUMIRA.


    --  XIENCE(TM) V International Launch -- In October, Abbott launched its

        XIENCE V drug-eluting stent (DES) system internationally.  Positive

        clinical results for XIENCE V from the SPIRIT II trial demonstrated

        that XIENCE V showed statistically significant superiority to the

        TAXUS(R) paclitaxel-eluting coronary stent system with respect to the

        study's primary endpoint.  XIENCE V uses the cobalt chromium

        Multi-Link Vision(R) Coronary Stent System, the most popular metallic

        stent platform in the world.


    --  HUMIRA Phase III Psoriasis Data -- Abbott presented Phase III

        psoriasis data that show HUMIRA to be the first biologic treatment to

        demonstrate superiority over methotrexate.  Eighty percent of patients

        treated with HUMIRA achieved at least a 75 percent improvement in

        disease severity after 16 weeks of treatment.  An estimated 125

        million people worldwide suffer from psoriasis, a chronic autoimmune

        skin disease.


    --  Kos Pharmaceuticals Acquisition -- In December, Abbott successfully

        completed the acquisition of Kos Pharmaceuticals.  Kos complements

        Abbott's existing franchise in the $20 billion global dyslipidemia

        market and strengthens the late-stage and mid-term pharmaceutical

        pipeline with opportunities in asthma, inhaled insulin and cholesterol

        management.


    --  Divestiture of Core Laboratory Diagnostics Business -- In January

        2007, Abbott announced the sale of its core laboratory and point of

        care diagnostics businesses to GE for $8.13 billion.  This divestiture

        does not include Abbott's Molecular Diagnostics and Diabetes Care

        businesses.



    Abbott issues earnings per share and sales growth guidance for 2007

For the first time, Abbott is announcing guidance for earnings per share excluding specified items of $2.77 to $2.83 for the full-year 2007. This guidance reflects the recently announced sale of Abbott's core laboratory and point of care diagnostic businesses and includes both the results of these businesses while owned by Abbott and the redeployment of proceeds after closing the transaction, which is expected in the first half of 2007. Abbott is forecasting 2007 sales growth of 13 percent to 15 percent.

Abbott forecasts a net gain from specified items for the full-year 2007 of $2.00 per share, which includes a gain of approximately $2.25 per share related to the sale of the core laboratory and point of care diagnostic businesses offset by costs of $0.25 per share, primarily associated with acquisition integration and cost reduction initiatives. Including these net specified items, projected earnings per share under GAAP would be $4.77 to $4.83 for the full-year 2007.

These forecasts exclude any one-time costs associated with the sale of the core laboratory and point of care diagnostic businesses, which will be provided at a later date.

Abbott declares quarterly dividend

On Dec. 8, 2006, the board of directors of Abbott declared the company's quarterly common dividend of 29.5 cents per share. The cash dividend is payable Feb. 15, 2007, to shareholders of record at the close of business on Jan. 12, 2007. This marks the 332nd consecutive dividend paid by Abbott since 1924.

About Abbott

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs 65,000 people and markets its products in more than 130 countries.

Abbott's news releases and other information are available on the company's Web site at http://www.abbott.com . Abbott will webcast its live fourth-quarter earnings conference call through its Investor Relations Web site at http://www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the call will be available after 11 a.m. Central time.

             - Private Securities Litigation Reform Act of 1995 -

               A Caution Concerning Forward-Looking Statements

Some statements in this news release may be forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors," and Exhibit 99.1 to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2005, and in Item 1A, "Risk Factors," to our Quarterly Report on Securities and Exchange Commission Form 10-Q for the period ended March 31, 2006, and are incorporated by reference. We undertake no obligation to release publicly any revisions to forward- looking statements





                 Abbott Laboratories and Subsidiaries

                  Consolidated Statement of Earnings

           Fourth Quarter Ended December 31, 2006 and 2005

                             (unaudited)


                                                            Percent

                                  2006            2005      Change


    Net Sales               $6,217,969,000  $6,047,334,000    2.8  a)

    Cost of products sold    2,865,612,000   2,809,557,000    2.0  b)

    Research and

     development               596,167,000     490,392,000   21.6  b)

    Acquired in-process and

     collaborations R&D      1,307,000,000             ---    n/m

    Selling, general and

     administrative          1,703,112,000   1,446,583,000   17.7  b)

    Total Operating Cost

     and Expenses            6,471,891,000   4,746,532,000   36.3


    Operating (loss)

     earnings                 (253,922,000)  1,300,802,000    n/m


    Net interest expense        89,261,000      27,788,000  221.2

    Net foreign exchange

     (gain) loss                10,803,000       7,269,000   48.6

    (Income) from TAP

     Pharmaceutical Products

     Inc. joint venture       (118,528,000)   (135,746,000) (12.7)

    Other (income) expense,

     net                         6,642,000       1,567,000    n/m

    (Loss) Earnings before

     taxes                    (242,100,000)  1,399,924,000    n/m

    Taxes on earnings          234,114,000     423,508,000  (44.7)


    Net (Loss) Earnings      $(476,214,000)   $976,416,000    n/m  b)


    Net Earnings Excluding

     Specified Items, as

     described below        $1,152,966,000  $1,176,934,000   (2.0) b) c)


    Diluted (Loss) Earnings

     Per Common Share               $(0.31)          $0.63    n/m  b)


    Diluted Earnings Per

     Common Share Excluding

     Specified Items, as

     described below                 $0.75           $0.76   (1.3) b) c)


    Diluted Earnings Per

     Common Share Excluding

     Specified Items and

     Incremental Stock

     Compensation Expense,

     as described below              $0.78           $0.76    2.6  b) c)


    Average Number of Common

     Shares Outstanding Plus

     Dilutive Common Stock

     Options and Awards      1,533,489,000   1,554,211,000



    a) Adjusting both periods for the amendment of the Boehringer Ingelheim

       (BI) distribution agreement, net sales increased by 14.5 percent.


    b) Incremental stock compensation expense in 2006 totaled $40 million,

       after-tax, or $0.03 per share. See Q&A Answer 4 for stock compensation

       expense detail by Consolidated Statement of Earnings line item.


    c) 2006 Net Earnings Excluding Specified Items excludes after-tax charges

       of $1.3 billion, or $0.85 per share, for acquired in-process and

       collaborations research and development primarily related to the Kos

       acquisition, $110 million, or $0.07 per share, for costs associated

       with cost reduction initiatives, $74 million, or $0.05 per share,

       primarily for costs associated with an asset impairment related to the

       generic introduction of Biaxin XL, $69 million, or $0.04 per share, for

       litigation associated with the settlement of an intellectual property

       matter and $76 million, or $0.05 per share, for acquisition integration

       activities and other.


       2005 Net Earnings Excluding Specified Items excludes $194 million, or

       $0.13 per share, related to the tax expense associated with

       repatriation of foreign earnings in connection with the American Jobs

       Creation Act of 2004, after-tax charges of $38 million, or $0.02 per

       share, related to cost reduction initiatives, $36 million, or $0.02,

       per share related to litigation reserves associated with a patent

       dispute resolution and $39 million, or $0.03 per share, related to

       acquisition integration activities. These specified items were

       partially offset by a favorable adjustment to tax expense of

       $106 million, or $0.07 per share, primarily resulting from a resolution

       of prior years' tax accrual requirements.


       NOTE: See attached questions and answers section for further

       explanation of Consolidated Statement of Earnings line items.


       n/m = Percent change is not meaningful.




                     Abbott Laboratories and Subsidiaries

                      Consolidated Statement of Earnings

                Twelve Months Ended December 31, 2006 and 2005

                                 (unaudited)

                                                          Percent

                                2006             2005      Change


    Net Sales            $22,476,322,000  $22,337,808,000    0.6  a)

    Cost of products

     sold                  9,815,147,000   10,641,111,000   (7.8) a) b)

    Research and

     development           2,255,271,000    1,821,175,000   23.8  b)

    Acquired in-process

     and collaborations

     R&D                   2,014,000,000       17,131,000    n/m

    Selling, general and

     administrative        6,349,685,000    5,496,123,000   15.5  b)

    Total Operating Cost

     and Expenses         20,434,103,000   17,975,540,000   13.7


    Operating earnings     2,042,219,000    4,362,268,000  (53.2)


    Net interest expense     292,347,000      153,662,000   90.3

    Net foreign exchange

     (gain) loss              28,441,000       21,804,000   30.4

    (Income) from TAP

     Pharmaceutical Products

     Inc. joint venture     (475,811,000)    (441,388,000)   7.8

    Other (income)

     expense, net            (79,128,000)       8,270,000    n/m  c)

    Earnings before taxes  2,276,370,000    4,619,920,000  (50.7)

    Taxes on earnings        559,615,000    1,247,855,000  (55.2)


    Net Earnings          $1,716,755,000   $3,372,065,000  (49.1) b)


    Net Earnings Excluding

     Specified Items, as

     described below      $3,880,826,000   $3,908,524,000   (0.7) b) d)


    Diluted Earnings Per

     Common Share                  $1.12            $2.16  (48.1) b) e)


    Diluted Earnings Per

     Common Share Excluding

     Specified Items, as

     described below               $2.53            $2.50    1.2  b) d) e)


    Diluted Earnings Per

     Common Share Excluding

     Specified Items and

     Incremental Stock

     Compensation Expense,

     as described below            $2.67            $2.50    6.8  b) d) e)


    Average Number of Common

     Shares Outstanding Plus

     Dilutive Common Stock

     Options and Awards    1,536,724,000    1,564,103,000



    a) Adjusting both periods for the amendment of the Boehringer Ingelheim

       (BI) distribution agreement, net sales increased by 11.6 percent. The

       decline in Cost of products sold in 2006 was primarily due to the

       amended BI agreement.


    b) Incremental stock compensation expense in 2006 totaled $226 million,

       after-tax, or $0.15 per share. See Q&A Answer 4 for stock compensation

       expense detail by Consolidated Statement of Earnings line item.


    c) The increase in Other (income) expense, net over the prior year

       reflects fair-value adjustments for the gain-sharing aspect of the

       Boston Scientific stock purchase, which was classified as a specified

       item and excluded from full-year ongoing results, as discussed in

       footnote 4 below.


    d) 2006 Net Earnings Excluding Specified Items excludes after-tax charges

       of $1.7 billion, or $1.13 per share, for acquired in-process and

       collaborations research and development, $141 million, or $0.09 per

       share, for cost reduction initiatives, $220 million, or $0.14 per

       share, for integration activities and other primarily related to the

       Guidant acquisition, $74 million, or $0.05 per share, primarily for

       costs associated with an asset impairment related to the generic

       introduction of Biaxin XL, $70 million, or $0.05 per share, for costs

       associated with Abbott's decision to discontinue the commercial

       development of the ZoMaxx drug-eluting stent, $69 million, or $0.04 per

       share, for litigation costs associated with the settlement of an

       intellectual property matter and $53 million, or $0.04 per share, for a

       philanthropic contribution to the Abbott Fund. These specified items

       were partially offset by an after-tax gain of ($70 million), or ($0.04)

       per share, for fair-value adjustments for the gain-sharing aspect of

       the Boston Scientific stock purchase and a favorable adjustment to tax

       expense of ($132 million), or ($0.09) per share, as a result of the

       resolution of prior years' tax audits.


       2005 Net Earnings Excluding Specified Items excludes after-tax charges

       of $234 million, or $0.15 per share, related to cost reduction

       initiatives, $70 million, or $0.04 per share, related to acquisition,

       integration and other charges, $44 million, or $0.03 per share, related

       to an increase in a bad debt reserve associated with an unfavorable

       court ruling, $36 million, or $0.02 per share, related to litigation

       reserves resulting from a patent dispute resolution, and $13 million,

       or $0.01 per share, for acquired in-process R&D. 2005 also excludes

       $245 million, or $0.16 per share, related to the tax expense associated

       with the repatriation of foreign earnings. These items were partially

       offset by a favorable adjustment to tax expense of $106 million, or

       $0.07 per share, primarily resulting from a resolution of prior years'

       tax accrual requirements.


    e) The sum of the four quarters in 2006 do not add to the full-year

       diluted earnings per common share due to rounding.


    NOTE: See attached questions and answers section for further explanation

    of Consolidated Statement of Earnings line items.


    n/m = Percent change is not meaningful.




                             Questions & Answers


    Q1)  What impacted total sales growth?


    A1)  Total sales growth for the fourth quarter was 14.5 percent, including

         a 1.5 percent favorable impact of exchange rates and adjusted for

         sales from the Boehringer Ingelheim (BI) distribution agreement in

         both periods. Strong results in both pharmaceutical products

         (adjusted for BI) and medical products drove the performance this

         quarter. Reported sales were $6.2 billion, up 2.8 percent, reflecting

         the BI impact.


         As announced in August 2005, we amended our co-promotion and

         distribution agreement for the three BI products: Mobic, Flomax and

         Micardis. As of Jan. 1, 2006, Abbott no longer distributed these

         products and no longer recorded sales for distribution activities.

         Although this change reduced reported 2006 sales growth, it also

         resulted in significant improvement in the gross margin ratio, as

         discussed in Q&A Answer 7. Abbott earned a small residual commission

         related to these products in 2006.



    Q2)  What drove double-digit medical products sales growth?


    A2)  Medical Products sales growth of approximately 23 percent was led by

         Abbott Vascular, which achieved sales of $389 million, up

         significantly from the prior year, including the contribution from

         the Guidant acquisition. Strong performance in Abbott Vascular was

         driven by continued growth in vessel closure, strong carotid stent

         sales and an increase in coronary stent sales. Continued double-digit

         sales growth in International Nutritionals and Abbott Molecular

         contributed to the strong performance in the quarter.



    Q3)  What drove pharmaceutical sales growth, as adjusted for the BI

         products?


    A3)  U.S. pharmaceutical sales growth of approximately 10 percent,

         adjusted for the impact of the amended BI agreement, was led by

         HUMIRA, which increased more than 30 percent in the United States as

         the product continued to gain market share in both the rheumatology

         and dermatology self-injectable biologics markets. During the

         quarter, Abbott was granted 6-month Priority Review status by the

         U.S. Food and Drug Administration for HUMIRA in treating Crohn's

         disease. A response from the agency is expected in the first quarter

         of 2007. Kaletra sales in the United States increased nearly

         11 percent, driven by continued strong uptake of the new tablet

         formulation. Reported U.S. pharmaceutical sales declined

         18.2 percent, reflecting the BI impact.


         In addition, sales of Abbott's international pharmaceuticals

         increased nearly 9 percent during the quarter, including a

         3.8 percent favorable impact from exchange. International growth was

         favorably impacted by the continued strength of HUMIRA, with sales

         this quarter up 58 percent including the favorable impact of

         exchange.



    Q4)  How did stock compensation expense impact the quarter and full year?


    A4)  Fourth-quarter and full-year 2006 earnings per share include

         incremental stock compensation expense of $0.03 and $0.15 per share,

         respectively, which was included in the various line items of the

         Consolidated Statement of Earnings, as follows (dollars in millions,

         except per-share data):


                                        4Q06              FY06

         Cost of products sold            $9               $37

         R&D                             $14               $73

         SG&A                            $29              $187

         Pre-tax total                   $52              $297

         Taxes                           $12               $71

         After-tax total                 $40              $226


         Per Share                     $0.03             $0.15



         As a reminder, most stock compensation expense was not charged to

         earnings under GAAP prior to 2006.



    Q5)  What drove the double-digit increase in R&D and SG&A this quarter?


    A5)  On a reported basis, R&D investment increased 22 percent this

         quarter, including specified items, stock compensation expense and

         the impact from the Guidant acquisition, reflecting continued

         investment in our broad-based pipeline, including vascular products

         and HUMIRA.


         Reported SG&A expense increased 18 percent this quarter, also

         including specified items, stock compensation expense and the impact

         from the Guidant acquisition, driven by continued spending on new and

         ongoing promotional initiatives, including preparation for new

         indications for HUMIRA and the international launch of Xience V.



    Q6)  How did specified items and stock compensation expense affect

         reported results?


    A6)  Specified items and stock compensation expense impacted

         fourth-quarter Net Earnings as follows (dollars in millions, except

         earnings-per-share data):



                                        4Q06                    4Q05

                                  Earnings                Earnings

                                        After-                  After-

                              Pre-tax     tax    EPS   Pre-tax    tax    EPS

    As reported                 ($242)  ($476) ($0.31) $1,400    $976   $0.63

    Adjusted for specified

     items:

      Acquired in-process &

       collaborations R&D      $1,307  $1,300   $0.85     ---     ---     ---

      Cost reduction

       initiatives               $144    $110   $0.07     $51     $38   $0.02

      Asset impairment            $98     $74   $0.05     ---     ---     ---

      Litigation settlement       $90     $69   $0.04     $47     $36   $0.02

      Integration activities

       and other                  $96     $76   $0.05     $51     $39   $0.03

      Tax accrual/audit

       resolution                 ---     ---     ---     ---   ($106) ($0.07)

      Tax expense for

       repatriation               ---     ---     ---     ---    $194   $0.13

    Excluding specified items  $1,493  $1,153   $0.75  $1,549  $1,177   $0.76


    Add back incremental stock

     compensation expense         $52     $40   $0.03     ---     ---     ---


    As adjusted                $1,545  $1,193   $0.78  $1,549  $1,177   $0.76




         The pre-tax impact of the specified items by Consolidated Statement

         of Earnings line item is as follows (dollars in millions):



                                                       4Q06


                                                      Acquired

                                     Cost of             in-            Other

                                    Products           process        (Income)

                                       Sold     R&D      R&D     SG&A  Expense

    As reported                      $2,866    $596    $1,307   $1,703     $6

    Adjusted for specified items:

    Acquired in-process &

     collaborations R&D                 ---     ---    $1,307      ---    ---

    Asset impairment                    $98     ---       ---      ---    ---

    Cost reduction initiatives         $107     $29       ---       $8    ---

    Litigation settlement               $90     ---       ---      ---    ---

    Integration activities/other        $33     $11       ---      $46     $6

    As adjusted                      $2,538    $556       ---   $1,649   $---



         The fourth-quarter 2006 specified items above are primarily related

         to the Kos Pharmaceuticals and Guidant vascular acquisitions and

         initiatives to reduce costs and improve gross margins. The acquired

         in-process & collaborations R&D related primarily to the Kos

         Pharmaceuticals acquisition is an estimate that will be finalized in

         the coming months when appraisal work is completed. The asset

         impairment primarily reflects costs related to the third-party

         introduction of generic Biaxin XL in the fourth quarter. Cost

         reduction initiatives relate to previously announced activities

         designed to reduce costs and additional realignment of global

         pharmaceutical operations during the quarter. The litigation

         settlement is related to an intellectual property matter. Costs

         associated with integration activities are related to the continuing

         integration of the Guidant vascular acquisition.



    Q7)  How does the fourth-quarter gross margin profile compare to the prior

         year?


    A7)  The adjusted gross margin ratio, excluding specified items and stock

         compensation expense, improved sequentially from the third quarter

         and was up nearly 500 basis points from the prior year to

         59.3 percent, consistent with our forecast. Gross margin before and

         after specified items and stock compensation expense is shown below

         (dollars in millions):


                                         4Q06                   4Q05


                                Cost of          Gross Cost of          Gross

                                Products Gross  Margin Products Gross  Margin

                                  Sold   Margin    %     Sold   Margin    %

    As reported                  $2,866  $3,352  53.9%  $2,810  $3,238  53.5%


    Incremental stock

     compensation expense           ($9)     $9   0.1%     ---     ---    ---


    Excluding stock compensation

     expense                     $2,857  $3,361  54.0%  $2,810  $3,238  53.5%

    Adjust for specified items:

      Asset impairment             ($98)    $98   1.6%     ---     ---    ---

      Cost reduction initiatives  ($107)   $107   1.7%    ($22)    $22   0.4%

      Litigation settlement        ($90)    $90   1.5%     ---     ---    ---

      Integration

       activities/other            ($33)    $33   0.5%    ($29)    $29   0.5%


    As adjusted                  $2,529  $3,689  59.3%  $2,759  $3,289  54.4%



         The year-over-year improvement in the adjusted gross margin ratio

         resulted primarily from the amendment to the BI agreement.



    Q8)  What was the tax rate in the quarter?


    A8)  The tax rate for operations, excluding specified items, this quarter

         was 22.8 percent, reflecting the impact of the R&D tax credit, which

         was signed into law in December 2006. Excluding this tax credit, the

         tax rate for the quarter was 23.8 percent, consistent with previous

         forecasts. The reported tax rate is reconciled to the ongoing rate

         below (dollars in millions):


                                                         4Q06


                                               Pre-tax     Income       Tax

                                                Income       Tax        Rate

    As reported                                 ($242)      $234         n/m

    Acquired in-process and

     collaborations R&D                        $1,307         $6        0.5%

    Other specified items                        $428       $100       23.3%

    Excluding specified items                  $1,493       $340       22.8%

    Impact of R&D tax credit                      ---        $15        ---

    Excluding tax credit                       $1,493       $355       23.8%



    Q9)  Why did Net Interest Expense increase from the prior year?


    A9)  Net Interest Expense increased over the prior year primarily as a

         result of debt related to the Guidant vascular acquisition.



CONTACT: Media, Melissa Brotz, +1-847-935-3456, or Jonathon Hamilton,+1-847-935-8646, or Financial, John Thomas, +1-847-938-2655, or LarryPeepo, +1-847-935-6722, or Tina Ventura, +1-847-935-9390, all of Abbott

Web site: http://www.abbott.com/

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Posted: January 2007


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