Tax expense from prior year tax positions

[Table of Contents](#ib0ff9808fe764fdea19589324372f96b_7)Abbott Laboratories and SubsidiariesNotes to the Condensed Consolidated Financial StatementsSeptember 30, 2022(Unaudited)Note 10 — Litigation and Environmental Matters (Continued)Abbott is involved in various claims and legal proceedings, and Abbott estimates the range of possible loss for its legal proceedings and environmental exposures to be from approximately $40 million to $50 million. The recorded accrual balance at September 30, 2022 for these proceedings and exposures was approximately $45 million. This accrual represents management’s best estimate of probable loss, as defined by FASB ASC No. 450, “Contingencies.” Within the next year, legal proceedings may occur that may result in a change in the estimated loss accrued by Abbott. While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations.  
Note 11 — Post-Employment Benefits  
Retirement plans consist of defined benefit, defined contribution, and medical and dental plans. Net periodic benefit costs, other than service costs, are recognized in the Other (income) expense, net line of the Condensed Consolidated Statement of Earnings. Net cost recognized for the three and nine months ended September 30 for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:  


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|  |  | Defined Benefit Plans |  | Medical and Dental Plans |
|  |  | Three MonthsEnded Sept. 30 |  | Nine Months Ended Sept. 30 |  | Three MonthsEnded Sept. 30 |  | Nine Months Ended Sept. 30 |
| (in millions) |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Service cost - benefits earned during the period |  | $ | 92  |  |  | $ | 98  |  |  | $ | 282  |  |  | $ | 294  |  |  | $ | 13  |  |  | $ | 14  |  |  | $ | 38  |  |  | $ | 42  |  |
| Interest cost on projected benefit obligations |  | 74  |  |  | 62  |  |  | 225  |  |  | 186  |  |  | 9  |  |  | 8  |  |  | 27  |  |  | 25  |  |
| Expected return on plan assets |  | (231) |  |  | (211) |  |  | (701) |  |  | (633) |  |  | (8) |  |  | (6) |  |  | (23) |  |  | (20) |  |
| Net amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Actuarial loss, net |  | 58  |  |  | 79  |  |  | 174  |  |  | 238  |  |  | 2  |  |  | 7  |  |  | 8  |  |  | 21  |  |
| Prior service cost (credit) |  | —  |  |  | —  |  |  | 1  |  |  | 1  |  |  | (6) |  |  | (7) |  |  | (18) |  |  | (21) |  |
| Net cost (credit) |  | $ | (7) |  |  | $ | 28  |  |  | $ | (19) |  |  | $ | 86  |  |  | $ | 10  |  |  | $ | 16  |  |  | $ | 32  |  |  | $ | 47  |  |

  
Abbott funds its domestic defined benefit plans according to Internal Revenue Service funding limitations. International pension plans are funded according to similar regulations. In the first nine months of 2022 and 2021, $362 million and $366 million, respectively, were contributed to defined benefit plans. In the first nine months of 2022 and 2021, $28 million and $26 million, respectively, were contributed to the post-employment medical and dental plans.   
Note 12 — Taxes on Earnings  
Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. In the first nine months of 2022 and 2021, taxes on earnings include approximately $36 million and $97 million, respectively, in excess tax benefits associated with share-based compensation. In the first nine months of 2022, taxes on earnings also include approximately $20 million of tax expense as the result of the resolution of various tax positions related to prior years.  
Tax authorities in various jurisdictions regularly review Abbott’s income tax filings. Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease approximately $75 million to $100 million, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.19
