3.  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.

4.  Purchase Price= $46.83 (12/9/10)  Recent Price=$52.94 (11/9/2011)  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

5.  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.

10. ◦ 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

11.  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

12.  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

13.  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.

14.  Litigation: ◦ Clean Up Suits ◦ Patient Disputes  Legislative Issues: ◦ 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.

15. Company Split  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.

16.  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.

17.  Recommendations ◦ Strong Buy=3 ◦ Buy =9 ◦ Hold =11 ◦ Underperform =0 ◦ Sell =1 (Yahoo Finance)

18.  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