Illinois Investment Banking 1 Presented: April 26, 2016 Zinjun (Moby) Xu Tianyu (Jack) Shen

Illinois Investment Banking 2 Introduction to the Team Jack Shen Major: Master of Finance Graduation: May 2017 Moby Xu Major: Finance and Economics Graduation: May 2016

Illinois Investment Banking 3 Agenda Current Holding Company Overview Health care equipment's & pharmaceutical Industry Overview Macro-Economic Analysis Financial Analysis Financial Projection Valuation Recommendation 16

Illinois Investment Banking 4 Holding History & Current Holding October 2015: hold recommendation April 2015: recommendation to sell 100 out of 400, not supported October 2014: recommendation to sell 100 shares, not supported November 2013: Abbive Spinoff Hold average cost of $26.71 November 2012: Bought November 2011: Bought April 2011: Bought 52.10

Illinois Investment Banking 5 The Abbott Laboratories Company Overview The company operates in four segments, Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products. Company Overview Business Overview Company Officers FoundingFounded in 1900 LocationBased in Chicago, IL ManagementTalented and Experienced Team Market SectorHealth Care Equipment & Supplies Service Offerings Sales of a line of branded generic pharmaceutical products; a line of adult and pediatric nutritional products; Vascular Products etc. Customer Base Wholesalers, distributors, government agencies, health care facilities etc. The Abbott Laboratories (ABT) Chairman & CEO VP & CFO VP & Finance & Administration Miles D. White Brian B. Yoor Thomas C. Freyman Stephen R. Fussell VP & Human Resources Source: Company Website

Illinois Investment Banking 6 The Abbott Laboratories Segments Products Established Pharmaceutical Key Emerging Markets Other Emerging Market Diagnostic Products Immunochemistry Nutritional Products International Pediatric Nutritionals U.S. Pediatric Nutritionals International Adult Nutritionals U.S. Adult Nutritionals Vascular Products /Medical Devices Endovascular Coronary Devices

Illinois Investment Banking 7 Segments Overview September, 2014: Acquisition of CFR December 2014: Acquisition of Veropham Feb, 27, 2015: sale of its developed market business to Mylan Excluding foreign exchange impact: sales increased 34,.1% in 2015 and 14.9% 2014 Operating margins from this business increased from 18.7% in 2013 to 25% in 2015 Positively impacted by demographics & increasing rate of chronic diseases Lower input costs drove the margin improvements across the business Coronary, endovascular, vessel closure, and structural heart devices XIENCE Alpine --- the only product on the market in the U.S with an indication to treat chronic total occlusions. From 2013 – 2015, total vascular sales were flat, excluding the unfavorable impact ; Continued market penetration by the Core Laboratory business in the U.S and China, and growth in other emerging markets, most Notably in Latin America. Worldwide diagnostic sales increased 7.3 percent in 2015 and 6.4 percent in 2014, excluding the impact of foreign exchange. January 30, 2016, Abbott entered into a definitive agreement to acquire Alere, Inc. Pharmaceutical Nutritionals Diagnostics Recommendation to Current Owners Vascular Source: Company Website

Illinois Investment Banking 8 SWOT Analysis Strengths - Managed to grow dividends annually -Robust growth in each segments (excluding currency impact) > Weakness -- Significant investment in Mylan N.V and is subject to market risk --Research & Development may not succeed >Opportunities -Expanding to new areas: Vascular intervention sector -Emerging markets are growing -Life expectancy is growing Threats - Potential lawsuits and regulation costs on pollution -- Foreign currency exchange rate risk - Highly Competitive Market SWOT Analysis

Illinois Investment Banking 9 Industry Overview The industry is expected to continue facing the aftermath of the patent cliff, hampering industry revenue. Lower healthcare costs will constrain industry revenue growth  Revenue: 61.0bn  Annual Growth10-15: 4.5%  Annual Growth15-20: 6.2%  Profit: 7.7bn  Exports: $15.6bn  Businesses: 1,045 Key Statistics Industry Life Cycle : Growing to Mature Key Drivers Industry Outlook A growing older population and expansion into emerging markets will protect revenue Regulation for the Global Pharmaceutical s industry Technological change R&D expenditure Global number of adults aged 65 and older Trade-weighted index Increasing industry demands The Abbott positioned well within the industry with differentiated quality and product segment  The Pace of development has slowed  Heightened competitive pressures  Demand in emerging regions has constrained industry revenue growth  The development of new generics is increasing the industry’s share of the overall pharmaceuticals market  The number of industry participants is expected to steadily increase

Illinois Investment Banking 10 Key External Drivers Positive outlooks for two out of four external drivers  As regulations increase, the industry will contend with compliance-related operational costs that constrain profit  The level of regulation for the industry is expected to increase slowly during 2016, representing a potential threat for the industry.  Improvements to industry systems and technologies result in cost savings  Technology lowers operational costs, industry profit margins rise.  Technological change is expected to increase during 2016, representing a potential opportunity for the industry.  The trade-weighted index (TWI) measures the strength of the US dollar against the currencies of the country's major trading partners.  Higher TWI makes industry exports more expensive in foreign markets. The TWI is expected to increase in 2015, posing a potential threat to the industry. Global number of adults aged 65 and older Regulation for the Global Pharmaceuticals & Medicine Manufacturing industry Technological change R&D expenditureThe trade-weighted index (TWI)  The global number of adults aged 65 and older is expected to increase during  More than 90.0% of seniors and 58.0% of nonelderly adults have need-based demand for prescription medications.

Illinois Investment Banking 11 Porter’s Five Forces Analysis Threat of New Entrants *Low Threat of Substitutes *High Supplier Bargaining Power *Moderate Buyer Bargaining Power *Low Rivalry *High

Illinois Investment Banking 12 Technical Analysis (As of 4/26/2016)  Abbott’s return on equity has been improving since its spin-off of Abbvie at the beginning of 2013 Source: Stockcharts.com

Illinois Investment Banking 13 Potential Risk Factor: Strong dollar & Hillary Clinton Abbott Corporations – Buy back stock and pay dividends from loans Dollar Appreciation Borrower: cost more to borrow “Making a fortune off of people's misfortune” Clinton outlined a plan that would reform the way drug companies do business, particularly by stopping them from spending government grants on advertising and by allowing Medicare -- and the U.S. government -- to negotiate down prescription drug costs. Source: Hillary supporter's website

Illinois Investment Banking 14 Financial Projection : Revenue Projection Abbott Laboratories, Inc. Revenue Drivers and Assumptions Total Segmental Revenue Breakdown Pharmaceuticals 2, , ,720.0$4,158.1$4,603.4$5,045.3$5,502.3$5,974.2 % Change8.94%19.31% Nutrition 6, , ,975.0$7,011.0$7,066.0$7,134.4$7,198.4$7,303.0 % Change3.16%0.32% Diagnostics 4, , ,646.0$5,760.6$6,725.0$7,036.9$7,248.0$7,405.9 % Change3.87%-1.59% Vascular 3, , ,792.0$2,582.0$2,473.5$2,414.6$2,381.6$2,349.4 % Change-8.15%-6.50% Net Sales to External Customers$2,498.0$2,469.0$2,272.0$2,413.0 % Change-1.16%-7.98% Other-$239.0$0.0 % Change Total 19, , , , , , , ,445.5 % Growth 3.00%0.78%7.45%6.19%3.28%2.91%2.84%

Illinois Investment Banking 15 Financial Projection: Revenue Projection Key Continued Operation Revenue Forecast (Including foreign exchange impact) Total Established Pharmaceuticals Key Emerging Market$2,281.0$2,383.0$2,781.0$3,031.3$3,273.8$3,503.0$3,713.1$3,898.8 % Change4.47%16.70%9.00%8.00%7.00%6.00%5.00% Other Emerging Market$581.0$735.0$939.0$1,126.8$1,329.6$1,542.4$1,789.1$2,075.4 % Change 26.51%27.76%20.00%18.00%16.00% Total$2,862.0$3,118.0$3,720.0$4,158.1$4,603.4$5,045.3$5,502.3$5,974.2 % Change 8.94%19.31%11.78%10.71%9.60%9.06%8.58% Nutritionals International Pediatric$2,257.0$2,362.0$2,378.0$2,330.4$2,307.1 $2,330.2 % Change4.7%0.7%-2.00%-1.00%0.00% 1.00% U.S. Pediatric$1,532.0$1,533.0$1,592.0$1,663.6$1,721.9$1,764.9$1,800.2$1,836.2 % Change0.1%3.8%4.50%3.50%2.50%2.00% International Adult$1,601.0$1,756.0$1,729.0$1,677.1$1,643.6$1,627.2 $1,643.4 % Change9.7%-1.5%-3.00%-2.00%-1.00%0.00%1.00% U.S. Adult$1,350.0$1,302.0$1,276.0$1,339.8$1,393.4$1,435.2$1,463.9$1,493.2 % Change -3.6%-2.0%5.00%4.00%3.00%2.00% Total$6,740.0$6,953.0$6,975.0$7,011.0$7,066.0$7,134.4$7,198.4$7,303.0 % Change 3.16%0.32%0.52%0.78%0.97%0.90%1.45% Diagnostics Immunochemistry$3,458.0$3,614.0$3,529.0$4,587.7$5,505.2$5,780.5$5,953.9$6,073.0 % Change4.51%-2.35%30.00%20.00%5.00%3.00%2.00% Others$1,087.0$1,107.0$1,117.0$1,172.9$1,219.8$1,256.4$1,294.0$1,332.9 % Change 1.84%0.90%5.00%4.00%3.00% Total 4,5454,7214,6465,7616,7257,0377,2487,406 % Change 3.9%-1.6%24.0%16.7%4.6%3.0%2.2% Vascular Coronary Devices 2,412.00$2,342.0$2,176.0$2,067.2$1,963.8$1,904.9$1,866.8$1,829.5 % Change-2.90%-7.09%-5.00% -3.00%-2.00% Endovascular$475.00$527.00$520.00$514.80$ $514.75$ % Change10.95%-1.33%-1.00% 0.00%1.00% Others$364.0$117.0$96.0$52.8$35.3$20.8$12.7$7.4 % Change %-17.95%-45%-33%-41%-39%-42% Total 3, , , , , , , , % Change -8.15%-6.50%-7.52%-4.20%-2.38%-1.37%-1.35% Key continued sales 17, , , , , , , ,032.5 % Change 2.00%7.60%6.95%3.66%3.23%3.14%

Illinois Investment Banking 16 Financial Analysis: Income Statement INCOME STATEMENT E2017E2018E2019E2020E Revenue $ 19,657.0 $ 20,247.0 $ 20,405.0 $ 21,924.7 $ 23,280.9 $ 24,044.2 $ 24,743.2 $ 25,445.5 Growth (%) -3.0%0.8%7.4%6.2%3.3%2.9%2.8% Cost of Goods Sold 9, , , , , , , ,178.2 % of Sales 46.8%45.5%42.9%45.1%43.0%42.0%41.0%40.0% Gross Profit10,46411,02911,65812,04713,27013,94614,59815,267 gross margin 53.2%54.5%57.1%54.9%57.0%58.0%59.0%60.0% Amortization of intangible assets % of Sales 3.0%2.7%2.9%2.6%2.4%2.2%2.0%1.9% Research and development 1, , , , , , , ,035.6 % of Sales 7.0%6.6%6.9%7.4%7.9%8.0% Selling, general and administrative 6, , , , , , , ,339.7 % of Sales 32.4%32.3%33.3%32.6%32.7%32.9%32.7%32.8% Total Operating Cost and Expenses17,52417,64817,5389,35510,01210,34710,57110,855 Operating Earnings (EBIT)2,1332,5992,8672,6913,2583,5994,0284,412 % of margin10.9%12.8%14.1%12.3%14.0%15.0%16.3%17.3% Interest Expense Interest Income (67.0) (77.0) (105.0) (83.0) (88.3) (92.1) (87.8) (89.4) Net Interest Expense Net loss on extinguishment of debt Net foreign exchange (gain) loss 46.0 (24.0) (93.0) $ (24.87) $ (23.28) $ (24.04) $ (24.74) $ (25.45) % sales0.2%-0.1%-0.5%-0.1% Other (income) expense, net (32.0) 14.0 (281.0) $ (107.49) $ (116.40) $ (120.22) $ (123.72) $ (127.23) % sales -0.2%0.1%-1.4%-0.5% Pretax Income (Earnings from Continuing operation before Tax)2,0412,5183,1832,6683,2453,5954,0474,484 % of Sales 10.4%12.4%15.6%12.2%13.9%15.0%16.4%17.6% Income Tax Expense Tax rate 2.6%31.7%18.1%20.0% Earnings from Continuing Operations1,9881,7212,6062,1342,5962,8763,2383,587 % of Sales 10.1%8.5%12.8%9.7%11.2%12.0%13.1%14.1% Net Earnings from Discontinued Oprations, net of taxes Gain on sale of Discontinued Operations, net of taxes - - 1, Net Income 2, , , , , , , ,587.2

Illinois Investment Banking 17 Financial Analysis: Income Statement INCOME STATEMENT E2017E2018E2019E2020E Revenue $ 19,657.0 $ 20,247.0 $ 20,405.0 $ 21,924.7 $ 23,280.9 $ 24,044.2 $ 24,743.2 $ 25,445.5 Growth (%) -3.0%0.8%7.4%6.2%3.3%2.9%2.8% Cost of Goods Sold 9, , , , , , , ,178.2 % of Sales 46.8%45.5%42.9%45.1%43.0%42.0%41.0%40.0% Gross Profit10,46411,02911,65812,04713,27013,94614,59815,267 gross margin 53.2%54.5%57.1%54.9%57.0%58.0%59.0%60.0% Amortization of intangible assets % of Sales 3.0%2.7%2.9%2.6%2.4%2.2%2.0%1.9% Research and development 1, , , , , , , ,035.6 % of Sales 7.0%6.6%6.9%7.4%7.9%8.0% Selling, general and administrative 6, , , , , , , ,339.7 % of Sales 32.4%32.3%33.3%32.6%32.7%32.9%32.7%32.8% Total Operating Cost and Expenses17,52417,64817,5389,35510,01210,34710,57110,855 Operating Earnings (EBIT)2,1332,5992,8672,6913,2583,5994,0284,412 % of margin10.9%12.8%14.1%12.3%14.0%15.0%16.3%17.3% Interest Expense Interest Income (67.0) (77.0) (105.0) (83.0) (88.3) (92.1) (87.8) (89.4) Net Interest Expense Net loss on extinguishment of debt Net foreign exchange (gain) loss 46.0 (24.0) (93.0) $ (24.87) $ (23.28) $ (24.04) $ (24.74) $ (25.45) % sales0.2%-0.1%-0.5%-0.1% Other (income) expense, net (32.0) 14.0 (281.0) $ (107.49) $ (116.40) $ (120.22) $ (123.72) $ (127.23) % sales -0.2%0.1%-1.4%-0.5% Pretax Income (Earnings from Continuing operation before Tax)2,0412,5183,1832,6683,2453,5954,0474,484 % of Sales 10.4%12.4%15.6%12.2%13.9%15.0%16.4%17.6% Income Tax Expense Tax rate 2.6%31.7%18.1%20.0% Earnings from Continuing Operations1,9881,7212,6062,1342,5962,8763,2383,587 % of Sales 10.1%8.5%12.8%9.7%11.2%12.0%13.1%14.1% Net Earnings from Discontinued Oprations, net of taxes Gain on sale of Discontinued Operations, net of taxes - - 1, Net Income 2, , , , , , , ,587.2

Illinois Investment Banking 18 Financial Analysis Ratios Analysis Return on Assets Gross Margin Liquidity RatioInterest Coverage Ratio ROE

Illinois Investment Banking 19 Financial Analysis Ratios Analysis

Illinois Investment Banking 20 Financial Analysis DuPont Analysis Tax Burden Interest Burden Operating Margin Asset Turnover Leverage Return on Equity  Abbott’s return on equity has been improving since its spin-off of Abbvie at the beginning of 2013

Illinois Investment Banking 21 Financial Projection: WACC %2.50%3.00%3.50%4.00%4.50% 8.80% % % % % % %

Illinois Investment Banking 22 Comparable Companies Description Company NameTickerDescription Boston Scientific CorporationBSX Boston Scientific Corporation is a developer, manufacturer and marketer of medical devices that are used in a range of interventional medical specialties. It operates in three segments: Cardiovascular, Rhythm Management and MedSurg. Baxter International Inc BAX Baxter International Inc. (Baxter) is a diversified healthcare company. The Company operates in two segments: BioScience segment, which include three commercial franchises: Hemophilia, BioTherapeutics and BioSurgery, and Medical Products segment, which include four commercial franchises: Fluid Systems, Renal, Specialty Pharmaceuticals and BioPharma Solutions. St. Jude Medical Inc STJ St. Jude Medical, Inc. is focused on the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas, and interventional pain therapy and neurostimulation devices for the management of chronic pain and movement disorders. Medtronic plc MDT Medtronic plc (Medtronic) is a medical technology and services company. The Company operates in four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group and Diabetes Group. Styker Corporation SYK Stryker Corporation (Stryker) is a medical technology company. The Company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. Johson & Johson JNJ Johnson & Johnson is a holding company. The Company is engaged in the research and development, manufacture and sale of a range of products in the health care field. The Company is organized into three business segments: Consumer, Pharmaceutical and Medical Devices.

Illinois Investment Banking 23 Comparable Analysis The valuation range of comparable companies is about $17 Billion to $313 Billion, or EV/EBTIDA multiples of 13.2x to 15.4x

Illinois Investment Banking 24 Valuation

Illinois Investment Banking 25 Final Recommendation