Sang Hyuk Yoon | Tongsu (Serena) Peng NYSE: ABT Sang Hyuk Yoon | Tongsu (Serena) Peng October 13, 2016

Team Introduction Tongsu (Serena) Peng Sang Hyuk Yoon Year: Senior Graduation: May 2017 Major: B.S Accountancy & B.S Finance Year: Senior Graduation: December 2016 Major: B.S Accountancy & B.S Finance Sang Hyuk Yoon

Agenda 4 6 9 12 14 15 23 Business Overview Industry Overview Macroeconomics Overview Transactions Technical Analysis Financial Analysis Recommendation 4 6 9 12 14 15 23

Abbott Laboratories Overview Company Overview Business Overview Diagnostics 23% Pharmaceuticals 18% Vascular 14% Nutrition 34% Other 11% Founded Founded in 1888 Location Headquartered in Illinois Sector Healthcare Industry Medical Appliances & Equipment Segments Nutrition, Medical Devices, Diagnostics, Pharmaceuticals Customers Retailers, Wholesalers, Hospitals, etc Executive Leadership Name Title Miles White Chairman, CEO Brian Yoor CFO, Senior VP Finance Thomas Freyman Executive VP Finance & Administration Stephen Fussell Executive VP Human Resources Michael Warmuth Executive VP Pharmaceuticals Statistics (as of 10/12/2016) Market Cap 60.24B Enterprise Value 64.98B Shares Outstanding 1.47B Dividend Yield 2.39% *Data from 2016 10-K *Data from Yahoo Finance. http://finance.yahoo.com/quote/ABT/key-statistics?p=ABT

Management Pharmaceuticals Diagnostics Nutrition Vascular Focus on the sale of its products in emerging market Sold its developed markets branded generics pharmaceuticals to Maylan Spun off AbbVie, a research-based pharmaceutical firm Introduce new products meeting market demand Invest in its global infrastructure to expand its global presence Formed a strategic alliance w/Fonterra, the world’s largest diary cooperative Continue market penetration in U.S., China, and Latin America Execute on efficiency initiatives in the manufacturing and supply chain Acquired Alere, a global leader in point of care diagnostics Continue to develop the worldwide marketing leading DES Introduce vascular products to various markets Conduct cost improvement initiatives to obtain a higher profit margin *Data from 2016 10-K

. - Porter’s Five Forces *Moderate Threat of New Entrants Substitutes Supplier Bargaining Power Buyer Rivalry *High *Low *Moderate Effect of Compliments Forces Level Factors Threat of New Entrants Low High Capital Requirements Economies of Scale Distribution Channel Threat of Substitutes High Competing Brands Generic Drugs Therapies / Oriental Clinics Supplier Bargaining Power In-house Production Overseas Production Strategical Alliance Buyer Bargaining Power Moderate Government Regulation Mass Purchase (Hospitals, Retailers) Individual Buyers Rivalry Fragmented Market Merger & Acquisition Marketing Effect of Compliments Regulation (Affordable Care Act) Healthcare Provider Medical Insurance Company

Industry Life Cycle Re-innovation Revival/Decline Introduction Growth Maturity Sales Volume Time FDA Approval & Patent Marketing Distribution Patent Expiration Modification

SWOT Analysis Strength Opportunity Weakness Threats Various Products Patents Protection Strong Brand Name Steady Growth Growing Dividends Strength Expansion to Global Market Life Expectancy Growth Global Population Growth Merger & Acquisition Biotechnology Boom Opportunity Spin-off of AbbVie High R&D Expenses / Long R&D Time Patent Expiration Complex Manufacturing Process Litigation Weakness Government Regulations Generic Pharmaceutical Firms Small Biotechnology Firms Currency Exchange Rate Intense Rivalry among competitors Threats

Macroeconomic Overview Population 65 and Above (% of Total) Gross Domestic Product (in $ Trillion) Health Expenditure per Capital: *Data from World Bank. http://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS?end=2014&start=1995&view=chart . *Data from World Bank. http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2014&start=1995&view=chart

Macroeconomic Overview Healthcare Expenditure per Capital Life Expectancy *Data from World Bank. http://data.worldbank.org/indicator/SH.XPD.PCAP?end=2014&start=1995&view=chart *Data from World Bank. http://data.worldbank.org/indicator/SP.DYN.LE00.IN?end=2014&start=1995&view=chart

segment, which experience 39% YoY decrease Recent News Abbott’s M&A target ($25 billion)St. Jude Medical is facing a batter issue Part of Diabetes Care segment, which experience 39% YoY decrease Sold for $4.3 billion *Data from Yahoo Finance. http://finance.yahoo.com/quote/ABT?p=ABT

Key Transactions Current Holdings (as of 2015/10/12) Date Acquired Price ($) Volume (shares) Current Gain ($) (%) Weighted Average Costs Total Gain ($) Total Gain 2011/04/28 24.97 200 40.98 3,202.00 64.12 26.72 5,705.00 53.38 2011/11/11 25.38 100 1,560.00 61.47 2012/12/10 31.55 943.00 29.89 Stock Price History (as of 2015/10/12) Trailing P/E 27.05 Forward P/E 455.33 Beta 1.57 52-Week Change -0.05% S&P500 52-Week Change 6.64% 52 Week High 46.38 52 Week Low 36.00 50-Day Moving Average 42.16 200-Day Moving Average 41.39 Dividend Yield 1.04 (2.39%) *Data from Yahoo Finance. http://finance.yahoo.com/quote/ABT/key-statistics?p=ABT

Insider Transactions (Q3 2016) Date Officer Transaction Type Price Volume 2016/07/29 Thomas Freyman Disposition 44.4500 42,863 Option Execute 25.2461 56,000 2016/07/28 Stephen Fussell Sell 45.0000 41,500 2016/07/26 Michael Warmuth 43.4800 26,800 2016/07/25 Miles White Buy 43.0650 242,547 555,000 43.0750 181,263 43.2300 112,953 43.0950 176,804 43.2800 17,933 Robert Funck 43.0800 (With White Miles) Q3 2016 # of Shares Bought 1,437,600 # of Shares Sold 137,963 Net Activity 1,299,637 (Without White Miles) Q3 2016 # of Shares Bought 151,100 # of Shares Sold 137,963 Net Activity 13,137 *Data from Yahoo Finance. http://finance.yahoo.com/quote/ABT/holders?p=ABT

Technical Analysis

Ratio Analysis

Ratio Analysis Cont.

Comparable Companies Comparable Ticker Stock Price Description BDX Becton Dickinson and Company BDX 173.5 Develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Its BD Medical segment provides medical consumables, such as syringes and surgical sets and its Life Science segment provides blood analyzers and develops supplements for biopharmaceutical manufacturing. Boston Scientific Corporation BSX 23.2 Develops, manufactures, and markets medical devices for use in various interventional medical specialties worldwide. It operates through three segments: Cardiovascular, Rhythm Management, and MedSurg. Medtronic plc MDT 83.7 Manufactures and sells device-based medical therapies worldwide. It operates in four segments: Cardiac and Vascular Group, Minimally Invasive Therapies Group, Restorative Therapies Group, and Diabetes Group. Baxter International Inc. BAX 47 Provides a portfolio of renal and hospital products. Its Renal segment provides products and services to treat end-stage renal disease. Its Hospital Products segment manufactures intravenous (IV) solutions and other administration sets. *Data from Capital IQ

Comparable Analysis Implied Price: $42.32

Revenue Growth Drivers Internal Growth GDP Growth Inflation Healthcare Industry Growth

Discount Rate Discount Rate: 9.61%

DCF Model (fundamental) Implied Price: $40.94

Sensitivity Analysis Less Conservative = Higher Price More Conservative = Lower Price

Potential Opportunities: Recommendation DCF Valuation $ 40.94 Potential Opportunities: Expansion to Global Market Life Expectancy Growth Global Population Growth Merger & Acquisition Biotechnology Boom Current Price $ 40.98 Hold Comparable Valuation $ 42.32

Q & A