UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35565

AbbVie Inc.


(Exact name of registrant as specified in its charter)
Delaware						32-0375147
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification number)

1 North Waukegan Road

North Chicago, Illinois 60064-6400

Telephone: (847) 932-7900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ABBV

New York Stock Exchange

Chicago Stock Exchange

1.500% Senior Notes due 2023

ABBV23B

New York Stock Exchange

1.375% Senior Notes due 2024

ABBV24

New York Stock Exchange

1.250% Senior Notes due 2024

ABBV24B

New York Stock Exchange

0.750% Senior Notes due 2027

ABBV27

New York Stock Exchange

2.125% Senior Notes due 2028

ABBV28

New York Stock Exchange

2.625% Senior Notes due 2028

ABBV28B

New York Stock Exchange

2.125% Senior Notes due 2029

ABBV29

New York Stock Exchange

1.250% Senior Notes due 2031

ABBV31

New York Stock Exchange

As of October ~~26, 2022,~~27, 2023, AbbVie Inc. had ~~1,768,480,508~~1,765,537,421 shares of common stock at $0.01 par value outstanding.

AbbVie Inc. and Subsidiaries

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

AbbVie Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings (unaudited)


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions, except per share data)	(in millions, except per share data)	2022		2021		2022		2021		(in millions, except per share data)	2023		2022		2023		2022
Net revenues	Net revenues	$	14,812	$	14,342	$	42,933	$	41,311	Net revenues	$	13,927	$	14,812	$	40,017	$	42,933

Cost of products sold	Cost of products sold	5,022		4,390		13,244		13,126		Cost of products sold	6,485		5,022		14,711		13,244
Selling, general and administrative	Selling, general and administrative	3,304		3,083		11,843		9,089		Selling, general and administrative	3,372		3,304		9,679		11,843
Research and development	Research and development	1,614		1,661		4,720		5,095		Research and development	1,723		1,614		5,748		4,720
Acquired IPR&D and milestones	Acquired IPR&D and milestones	40		402		454		719		Acquired IPR&D and milestones	66		40		496		454
Other operating expense, net		229		500		57		432
Other operating expense (income), net										Other operating expense (income), net	—		229		(179)		57
Total operating costs and expenses	Total operating costs and expenses	10,209		10,036		30,318		28,461		Total operating costs and expenses	11,646		10,209		30,455		30,318
Operating earnings	Operating earnings	4,603		4,306		12,615		12,850		Operating earnings	2,281		4,603		9,562		12,615

Interest expense, net	Interest expense, net	497		585		1,568		1,813		Interest expense, net	398		497		1,306		1,568
Net foreign exchange loss	Net foreign exchange loss	36		12		108		35		Net foreign exchange loss	25		36		97		108
Other expense (income), net	Other expense (income), net	(330)		21		427		2,284		Other expense (income), net	(95)		(330)		3,121		427
Earnings before income tax expense	Earnings before income tax expense	4,400		3,688		10,512		8,718		Earnings before income tax expense	1,953		4,400		5,038		10,512
Income tax expense	Income tax expense	448		508		1,139		1,214		Income tax expense	172		448		989		1,139
Net earnings	Net earnings	3,952		3,180		9,373		7,504		Net earnings	1,781		3,952		4,049		9,373
Net earnings attributable to noncontrolling interest	Net earnings attributable to noncontrolling interest	3		1		10		6		Net earnings attributable to noncontrolling interest	3		3		8		10
Net earnings attributable to AbbVie Inc.	Net earnings attributable to AbbVie Inc.	$	3,949	$	3,179	$	9,363	$	7,498	Net earnings attributable to AbbVie Inc.	$	1,778	$	3,949	$	4,041	$	9,363

Per share data	Per share data									Per share data
Basic earnings per share attributable to AbbVie Inc.	Basic earnings per share attributable to AbbVie Inc.	$	2.22	$	1.78	$	5.26	$	4.21	Basic earnings per share attributable to AbbVie Inc.	$	1.00	$	2.22	$	2.27	$	5.26
Diluted earnings per share attributable to AbbVie Inc.	Diluted earnings per share attributable to AbbVie Inc.	$	2.21	$	1.78	$	5.24	$	4.19	Diluted earnings per share attributable to AbbVie Inc.	$	1.00	$	2.21	$	2.26	$	5.24

Weighted-average basic shares outstanding	Weighted-average basic shares outstanding	1,771		1,770		1,771		1,769		Weighted-average basic shares outstanding	1,767		1,771		1,768		1,771
Weighted-average diluted shares outstanding	Weighted-average diluted shares outstanding	1,776		1,777		1,777		1,776		Weighted-average diluted shares outstanding	1,771		1,776		1,772		1,777

The accompanying notes are an integral part of these condensed consolidated financial statements.


~~2022~~2023 Form 10-Q \|			1

AbbVie Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
Net earnings	Net earnings	$	3,952	$	3,180	$	9,373	$	7,504	Net earnings	$	1,781	$	3,952	$	4,049	$	9,373

Foreign currency translation adjustments, net of tax expense (benefit) of $(11) for the three months and $(30) for the nine months ended September 30, 2022 and $(8) for the three months and $(32) for the nine months ended September 30, 2021		(989)		(361)		(2,043)		(794)
Net investment hedging activities, net of tax expense (benefit) of $165 for the three months and $348 for the nine months ended September 30, 2022 and $51 for the three months and $123 for the nine months ended September 30, 2021		599		184		1,265		444
Pension and post-employment benefits, net of tax expense (benefit) of $14 for the three months and $35 for the nine months ended September 30, 2022 and $17 for the three months and $50 for the nine months ended September 30, 2021		60		67		136		196

Cash flow hedging activities, net of tax expense (benefit) of $14 for the three months and $17 for the nine months ended September 30, 2022 and $13 for the three months and $16 for the nine months ended September 30, 2021		83		57		98		115
Foreign currency translation adjustments, net of tax expense (benefit) of $(17) for the three months and $(11) for the nine months ended September 30, 2023 and $(11) for the three months and $(30) for the nine months ended September 30, 2022										Foreign currency translation adjustments, net of tax expense (benefit) of $(17) for the three months and $(11) for the nine months ended September 30, 2023 and $(11) for the three months and $(30) for the nine months ended September 30, 2022	(457)		(989)		(279)		(2,043)
Net investment hedging activities, net of tax expense (benefit) of $84 for the three months and $26 for the nine months ended September 30, 2023 and $165 for the three months and $348 for the nine months ended September 30, 2022										Net investment hedging activities, net of tax expense (benefit) of $84 for the three months and $26 for the nine months ended September 30, 2023 and $165 for the three months and $348 for the nine months ended September 30, 2022	302		599		89		1,265
Pension and post-employment benefits, net of tax expense (benefit) of $1 for the three months and $11 for the nine months ended September 30, 2023 and $14 for the three months and $35 for the nine months ended September 30, 2022										Pension and post-employment benefits, net of tax expense (benefit) of $1 for the three months and $11 for the nine months ended September 30, 2023 and $14 for the three months and $35 for the nine months ended September 30, 2022	2		60		38		136
Cash flow hedging activities, net of tax expense (benefit) of $7 for the three months and $(1) for the nine months ended September 30, 2023 and $14 for the three months and $17 for the nine months ended September 30, 2022										Cash flow hedging activities, net of tax expense (benefit) of $7 for the three months and $(1) for the nine months ended September 30, 2023 and $14 for the three months and $17 for the nine months ended September 30, 2022	52		83		(2)		98
Other comprehensive loss	Other comprehensive loss	(247)		(53)		(544)		(39)		Other comprehensive loss	(101)		(247)		(154)		(544)
Comprehensive income	Comprehensive income	3,705		3,127		8,829		7,465		Comprehensive income	1,680		3,705		3,895		8,829
Comprehensive income attributable to noncontrolling interest	Comprehensive income attributable to noncontrolling interest	3		1		10		6		Comprehensive income attributable to noncontrolling interest	3		3		8		10
Comprehensive income attributable to AbbVie Inc.	Comprehensive income attributable to AbbVie Inc.	$	3,702	$	3,126	$	8,819	$	7,459	Comprehensive income attributable to AbbVie Inc.	$	1,677	$	3,702	$	3,887	$	8,819

The accompanying notes are an integral part of these condensed consolidated financial statements.


~~2022~~2023 Form 10-Q \|			2

AbbVie Inc. and Subsidiaries
Condensed Consolidated Balance Sheets


(in millions, except share data)	(in millions, except share data)	September 30, 2022		December 31, 2021		(in millions, except share data)	September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and equivalents	Cash and equivalents	$	11,832	$	9,746	Cash and equivalents	$	13,287	$	9,201
Short-term investments	Short-term investments	47		84		Short-term investments	3		28
Accounts receivable, net	Accounts receivable, net	10,743		9,977		Accounts receivable, net	11,412		11,254
Inventories	Inventories	3,172		3,128		Inventories	3,981		3,579
Prepaid expenses and other	Prepaid expenses and other	4,570		4,993		Prepaid expenses and other	4,541		4,401
Total current assets	Total current assets	30,364		27,928		Total current assets	33,224		28,463

Investments	Investments	235		277		Investments	275		241
Property and equipment, net	Property and equipment, net	4,893		5,110		Property and equipment, net	4,934		4,935
Intangible assets, net	Intangible assets, net	68,725		75,951		Intangible assets, net	58,603		67,439
Goodwill	Goodwill	31,726		32,379		Goodwill	32,091		32,156
Other assets	Other assets	5,382		4,884		Other assets	7,094		5,571
Total assets	Total assets	$	141,325	$	146,529	Total assets	$	136,221	$	138,805

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities	Current liabilities					Current liabilities
Short-term borrowings	Short-term borrowings	$	10	$	14	Short-term borrowings	$	2	$	1
Current portion of long-term debt and finance lease obligations	Current portion of long-term debt and finance lease obligations	9,197		12,481		Current portion of long-term debt and finance lease obligations	5,113		4,135
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	23,505		22,699		Accounts payable and accrued liabilities	29,658		25,402
Total current liabilities	Total current liabilities	32,712		35,194		Total current liabilities	34,773		29,538

Long-term debt and finance lease obligations	Long-term debt and finance lease obligations	60,399		64,189		Long-term debt and finance lease obligations	55,631		59,135
Deferred income taxes	Deferred income taxes	1,972		3,009		Deferred income taxes	2,044		2,190
Other long-term liabilities	Other long-term liabilities	30,215		28,701		Other long-term liabilities	31,644		30,655

Commitments and contingencies	Commitments and contingencies					Commitments and contingencies

Stockholders' equity	Stockholders' equity					Stockholders' equity
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,812,973,038 shares issued as of September 30, 2022 and 1,803,195,293 as of December 31, 2021		18		18
Common stock held in treasury, at cost, 44,572,117 shares as of September 30, 2022 and 34,857,597 as of December 31, 2021		(4,590)		(3,143)
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,822,577,212 shares issued as of September 30, 2023 and 1,813,770,294 as of December 31, 2022						Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,822,577,212 shares issued as of September 30, 2023 and 1,813,770,294 as of December 31, 2022	18		18
Common stock held in treasury, at cost, 57,091,177 shares as of September 30, 2023 and 44,589,000 as of December 31, 2022						Common stock held in treasury, at cost, 57,091,177 shares as of September 30, 2023 and 44,589,000 as of December 31, 2022	(6,525)		(4,594)
Additional paid-in capital	Additional paid-in capital	19,056		18,305		Additional paid-in capital	20,021		19,245
Retained earnings	Retained earnings	4,953		3,127		Retained earnings	933		4,784
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(3,443)		(2,899)		Accumulated other comprehensive loss	(2,353)		(2,199)
Total stockholders' equity	Total stockholders' equity	15,994		15,408		Total stockholders' equity	12,094		17,254
Noncontrolling interest	Noncontrolling interest	33		28		Noncontrolling interest	35		33
Total equity	Total equity	16,027		15,436		Total equity	12,129		17,287

Total liabilities and equity	Total liabilities and equity	$	141,325	$	146,529	Total liabilities and equity	$	136,221	$	138,805

The accompanying notes are an integral part of these condensed consolidated financial statements.


~~2022~~2023 Form 10-Q \|			3

AbbVie Inc. and Subsidiaries
Condensed Consolidated Statements of Equity (unaudited)


(in millions)	(in millions)	Common shares outstanding	Common stock		Treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Noncontrolling interest		Total		(in millions)	Common shares outstanding	Common stock		Treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Noncontrolling interest		Total
Balance at June 30, 2021		1,767	$	18	$	(3,022)	$	17,936	$	740	$	(3,103)	$	25	$	12,594

Net earnings attributable to AbbVie Inc.		—	—		—		—		3,179		—		—		3,179
Other comprehensive loss, net of tax		—	—		—		—		—		(53)		—		(53)
Dividends declared		—	—		—		—		(2,319)		—		—		(2,319)

Purchases of treasury stock		—	—		(6)		—		—		—		—		(6)
Stock-based compensation plans and other		1	—		8		172		—		—		—		180
Change in noncontrolling interest		—	—		—		—		—		—		2		2
Balance at September 30, 2021		1,768	$	18	$	(3,020)	$	18,108	$	1,600	$	(3,156)	$	27	$	13,577

Balance at June 30, 2022	Balance at June 30, 2022	1,768	$	18	$	(4,591)	$	18,906	$	3,516	$	(3,196)	$	35	$	14,688	Balance at June 30, 2022	1,768	$	18	$	(4,591)	$	18,906	$	3,516	$	(3,196)	$	35	$	14,688
Net earnings attributable to AbbVie Inc.	Net earnings attributable to AbbVie Inc.	—	—		—		—		3,949		—		—		3,949		Net earnings attributable to AbbVie Inc.	—	—		—		—		3,949		—		—		3,949
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—		—		—		(247)		—		(247)		Other comprehensive loss, net of tax	—	—		—		—		—		(247)		—		(247)
Dividends declared	Dividends declared	—	—		—		—		(2,512)		—		—		(2,512)		Dividends declared	—	—		—		—		(2,512)		—		—		(2,512)
Purchases of treasury stock	Purchases of treasury stock	—	—		(4)		—		—		—		—		(4)		Purchases of treasury stock	—	—		(4)		—		—		—		—		(4)
Stock-based compensation plans and other	Stock-based compensation plans and other	—	—		5		150		—		—		—		155		Stock-based compensation plans and other	—	—		5		150		—		—		—		155
Change in noncontrolling interest	Change in noncontrolling interest	—	—		—		—		—		—		(2)		(2)		Change in noncontrolling interest	—	—		—		—		—		—		(2)		(2)
Balance at September 30, 2022	Balance at September 30, 2022	1,768	$	18	$	(4,590)	$	19,056	$	4,953	$	(3,443)	$	33	$	16,027	Balance at September 30, 2022	1,768	$	18	$	(4,590)	$	19,056	$	4,953	$	(3,443)	$	33	$	16,027

Balance at December 31, 2020		1,765	$	18	$	(2,264)	$	17,384	$	1,055	$	(3,117)	$	21	$	13,097

Balance at June 30, 2023																	Balance at June 30, 2023	1,765	$	18	$	(6,528)	$	19,839	$	1,789	$	(2,252)	$	32	$	12,898
Net earnings attributable to AbbVie Inc.	Net earnings attributable to AbbVie Inc.	—	—		—		—		7,498		—		—		7,498		Net earnings attributable to AbbVie Inc.	—	—		—		—		1,778		—		—		1,778
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—		—		—		(39)		—		(39)		Other comprehensive loss, net of tax	—	—		—		—		—		(101)		—		(101)
Dividends declared	Dividends declared	—	—		—		—		(6,953)		—		—		(6,953)		Dividends declared	—	—		—		—		(2,634)		—		—		(2,634)

Purchases of treasury stock	Purchases of treasury stock	(7)	—		(803)		—		—		—		—		(803)		Purchases of treasury stock	—	—		(4)		—		—		—		—		(4)
Stock-based compensation plans and other	Stock-based compensation plans and other	10	—		47		724		—		—		—		771		Stock-based compensation plans and other	—	—		7		182		—		—		—		189
Change in noncontrolling interest	Change in noncontrolling interest	—	—		—		—		—		—		6		6		Change in noncontrolling interest	—	—		—		—		—		—		3		3
Balance at September 30, 2021		1,768	$	18	$	(3,020)	$	18,108	$	1,600	$	(3,156)	$	27	$	13,577
Balance at September 30, 2023																	Balance at September 30, 2023	1,765	$	18	$	(6,525)	$	20,021	$	933	$	(2,353)	$	35	$	12,129

Balance at December 31, 2021	Balance at December 31, 2021	1,768	$	18	$	(3,143)	$	18,305	$	3,127	$	(2,899)	$	28	$	15,436	Balance at December 31, 2021	1,768	$	18	$	(3,143)	$	18,305	$	3,127	$	(2,899)	$	28	$	15,436
Net earnings attributable to AbbVie Inc.	Net earnings attributable to AbbVie Inc.	—	—		—		—		9,363		—		—		9,363		Net earnings attributable to AbbVie Inc.	—	—		—		—		9,363		—		—		9,363
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—		—		—		(544)		—		(544)		Other comprehensive loss, net of tax	—	—		—		—		—		(544)		—		(544)
Dividends declared	Dividends declared	—	—		—		—		(7,537)		—		—		(7,537)		Dividends declared	—	—		—		—		(7,537)		—		—		(7,537)
Purchases of treasury stock	Purchases of treasury stock	(10)	—		(1,483)		—		—		—		—		(1,483)		Purchases of treasury stock	(10)	—		(1,483)		—		—		—		—		(1,483)
Stock-based compensation plans and other	Stock-based compensation plans and other	10	—		36		751		—		—		—		787		Stock-based compensation plans and other	10	—		36		751		—		—		—		787
Change in noncontrolling interest	Change in noncontrolling interest	—	—		—		—		—		—		5		5		Change in noncontrolling interest	—	—		—		—		—		—		5		5
Balance at September 30, 2022	Balance at September 30, 2022	1,768	$	18	$	(4,590)	$	19,056	$	4,953	$	(3,443)	$	33	$	16,027	Balance at September 30, 2022	1,768	$	18	$	(4,590)	$	19,056	$	4,953	$	(3,443)	$	33	$	16,027

Balance at December 31, 2022																	Balance at December 31, 2022	1,769	$	18	$	(4,594)	$	19,245	$	4,784	$	(2,199)	$	33	$	17,287
Net earnings attributable to AbbVie Inc.																	Net earnings attributable to AbbVie Inc.	—	—		—		—		4,041		—		—		4,041
Other comprehensive loss, net of tax																	Other comprehensive loss, net of tax	—	—		—		—		—		(154)		—		(154)
Dividends declared																	Dividends declared	—	—		—		—		(7,892)		—		—		(7,892)
Purchases of treasury stock																	Purchases of treasury stock	(12)	—		(1,969)		—		—		—		—		(1,969)
Stock-based compensation plans and other																	Stock-based compensation plans and other	8	—		38		776		—		—		—		814
Change in noncontrolling interest																	Change in noncontrolling interest	—	—		—		—		—		—		2		2
Balance at September 30, 2023																	Balance at September 30, 2023	1,765	$	18	$	(6,525)	$	20,021	$	933	$	(2,353)	$	35	$	12,129

The accompanying notes are an integral part of these condensed consolidated financial statements.


~~2022~~2023 Form 10-Q \|			4

AbbVie Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)


		Nine months ended September 30,					Nine months ended September 30,
(in millions) (brackets denote cash outflows)	(in millions) (brackets denote cash outflows)	2022		2021		(in millions) (brackets denote cash outflows)	2023		2022
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net earnings	Net earnings	$	9,373	$	7,504	Net earnings	$	4,049	$	9,373
Adjustments to reconcile net earnings to net cash from operating activities:	Adjustments to reconcile net earnings to net cash from operating activities:					Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation	Depreciation	582		630		Depreciation	565		582
Amortization of intangible assets	Amortization of intangible assets	5,728		5,912		Amortization of intangible assets	6,057		5,728
Deferred income taxes	Deferred income taxes	(1,415)		(153)		Deferred income taxes	(1,498)		(1,415)
Change in fair value of contingent consideration liabilities	Change in fair value of contingent consideration liabilities	647		2,447		Change in fair value of contingent consideration liabilities	3,432		647
Payments of contingent consideration liabilities						Payments of contingent consideration liabilities	(407)		(161)
Stock-based compensation	Stock-based compensation	539		563		Stock-based compensation	622		539
Acquired IPR&D and milestones	Acquired IPR&D and milestones	454		719		Acquired IPR&D and milestones	496		454
Other charges related to collaborations		—		500
Gain on divestitures	Gain on divestitures	(172)		(68)		Gain on divestitures	—		(172)
Non-cash litigation reserve adjustments, net of cash payments	Non-cash litigation reserve adjustments, net of cash payments	2,261		21		Non-cash litigation reserve adjustments, net of cash payments	(205)		2,261
Impairment of intangible assets	Impairment of intangible assets	770		50		Impairment of intangible assets	2,824		770
Other, net	Other, net	(151)		(185)		Other, net	(219)		(151)
Changes in operating assets and liabilities, net of acquisitions:	Changes in operating assets and liabilities, net of acquisitions:					Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	Accounts receivable	(1,039)		(572)		Accounts receivable	(273)		(1,039)
Inventories	Inventories	(516)		(30)		Inventories	(513)		(516)
Prepaid expenses and other assets	Prepaid expenses and other assets	(60)		(462)		Prepaid expenses and other assets	394		(60)
Accounts payable and other liabilities	Accounts payable and other liabilities	330		1,454		Accounts payable and other liabilities	3,661		491
Income tax assets and liabilities, net	Income tax assets and liabilities, net	184		(628)		Income tax assets and liabilities, net	(899)		184
Cash flows from operating activities	Cash flows from operating activities	17,515		17,702		Cash flows from operating activities	18,086		17,515

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities

Acquisitions and investments	Acquisitions and investments	(494)		(837)		Acquisitions and investments	(670)		(494)
Acquisitions of property and equipment	Acquisitions of property and equipment	(482)		(600)		Acquisitions of property and equipment	(572)		(482)
Purchases of investment securities	Purchases of investment securities	(1,428)		(73)		Purchases of investment securities	(43)		(1,428)
Sales and maturities of investment securities	Sales and maturities of investment securities	1,460		88		Sales and maturities of investment securities	41		1,460

Other, net	Other, net	769		223		Other, net	35		769
Cash flows from investing activities	Cash flows from investing activities	(175)		(1,199)		Cash flows from investing activities	(1,209)		(175)

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities

Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	2,000		1,000		Proceeds from issuance of long-term debt	—		2,000
Repayments of long-term debt and finance lease obligations	Repayments of long-term debt and finance lease obligations	(7,582)		(5,662)		Repayments of long-term debt and finance lease obligations	(2,355)		(7,582)

Dividends paid	Dividends paid	(7,537)		(6,947)		Dividends paid	(7,913)		(7,537)
Purchases of treasury stock	Purchases of treasury stock	(1,483)		(803)		Purchases of treasury stock	(1,969)		(1,483)
Proceeds from the exercise of stock options	Proceeds from the exercise of stock options	209		169		Proceeds from the exercise of stock options	149		209
Payments of contingent consideration liabilities	Payments of contingent consideration liabilities	(817)		(480)		Payments of contingent consideration liabilities	(735)		(817)
Other, net	Other, net	41		22		Other, net	50		41
Cash flows from financing activities	Cash flows from financing activities	(15,169)		(12,701)		Cash flows from financing activities	(12,773)		(15,169)
Effect of exchange rate changes on cash and equivalents	Effect of exchange rate changes on cash and equivalents	(85)		(69)		Effect of exchange rate changes on cash and equivalents	(18)		(85)
Net change in cash and equivalents	Net change in cash and equivalents	2,086		3,733		Net change in cash and equivalents	4,086		2,086
Cash and equivalents, beginning of period	Cash and equivalents, beginning of period	9,746		8,449		Cash and equivalents, beginning of period	9,201		9,746

Cash and equivalents, end of period	Cash and equivalents, end of period	$	11,832	$	12,182	Cash and equivalents, end of period	$	13,287	$	11,832

The accompanying notes are an integral part of these condensed consolidated financial statements.


~~2022~~2023 Form 10-Q \|			5

AbbVie Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 Basis of Presentation

Basis of Historical Presentation

The unaudited interim condensed consolidated financial statements of AbbVie Inc. (AbbVie or the company) have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the company’s audited consolidated financial statements and notes included in the company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the company’s financial position and operating results. Net revenues and net earnings for any interim period are not necessarily indicative of future or annual results.

During the three months ended March 31, 2022, AbbVie revised its classification of development milestone expense associated with licensing and collaboration arrangements in the consolidated statement of earnings. Milestone payments incurred prior to regulatory approval, which were previously included in research and development expense, are now presented as acquired IPR&D and milestones expense. The reclassification decreased research and development expense and increased acquired IPR&D and milestones expense by $12 million for the three months and $162 million for the nine months ended September 30, 2021. The company believes this presentation assists users of the financial statements to better understand the total upfront and subsequent development milestone payments incurred to acquire in-process research and development projects. Prior periods have been reclassified to conform to the current period presentation. The reclassification had no impact on total operating costs and expenses, operating earnings, net earnings, net earnings attributable to AbbVie, Inc., earnings per share, or total equity. Certain other reclassifications were made to conform the prior period interim condensed consolidated financial statements to the current period presentation.

Note 2 Supplemental Financial Information

Interest Expense, Net


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
Interest expense	Interest expense	$	560	$	596	$	1,664	$	1,843	Interest expense	$	555	$	560	$	1,660	$	1,664
Interest income	Interest income	(63)		(11)		(96)		(30)		Interest income	(157)		(63)		(354)		(96)
Interest expense, net	Interest expense, net	$	497	$	585	$	1,568	$	1,813	Interest expense, net	$	398	$	497	$	1,306	$	1,568

Inventories
(in millions) September 30,
2022 December 31,
2021
Finished goods $ 903 $ 932
Work-in-process 1,309 1,193
Raw materials 960 1,003
Inventories $ 3,172 $ 3,128


~~2022 Form 10-Q~~ \|			6


(in millions)	September 30, 2023		December 31, 2022
Finished goods	$	1,035	$	1,162
Work-in-process	1,690		1,417
Raw materials	1,256		1,000
Inventories	$	3,981	$	3,579

Property and Equipment, Net


(in millions)	(in millions)	September 30, 2022		December 31, 2021		(in millions)	September 30, 2023		December 31, 2022
Property and equipment, gross	Property and equipment, gross	$	10,679	$	10,727	Property and equipment, gross	$	11,374	$	10,986
Accumulated depreciation	Accumulated depreciation	(5,786)		(5,617)		Accumulated depreciation	(6,440)		(6,051)
Property and equipment, net	Property and equipment, net	$	4,893	$	5,110	Property and equipment, net	$	4,934	$	4,935

Depreciation expense was $196 million for the three months and $565 million for the nine months ended September 30, 2023 and $181 million for the three months and $582 million for the nine months ended September 30, ~~2022 and $223 million for the three months and $630 million for the nine months ended September 30, 2021.~~2022.


2023 Form 10-Q \|			6

Note 3 Earnings Per Share

AbbVie grants certain restricted stock units (RSUs) that are considered to be participating securities. Due to the presence of participating securities, AbbVie calculates earnings per share (EPS) using the more dilutive of the treasury stock or the two-class method. For all periods presented, the two-class method was more dilutive.

The following table summarizes the impact of the two-class method:


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions, except per share data)	(in millions, except per share data)	2022		2021		2022		2021		(in millions, except per share data)	2023		2022		2023		2022
Basic EPS	Basic EPS									Basic EPS
Net earnings attributable to AbbVie Inc.	Net earnings attributable to AbbVie Inc.	$	3,949	$	3,179	$	9,363	$	7,498	Net earnings attributable to AbbVie Inc.	$	1,778	$	3,949	$	4,041	$	9,363
Earnings allocated to participating securities	Earnings allocated to participating securities	18		21		43		53		Earnings allocated to participating securities	11		18		32		43
Earnings available to common shareholders	Earnings available to common shareholders	$	3,931	$	3,158	$	9,320	$	7,445	Earnings available to common shareholders	$	1,767	$	3,931	$	4,009	$	9,320
Weighted-average basic shares outstanding	Weighted-average basic shares outstanding	1,771		1,770		1,771		1,769		Weighted-average basic shares outstanding	1,767		1,771		1,768		1,771
Basic earnings per share attributable to AbbVie Inc.	Basic earnings per share attributable to AbbVie Inc.	$	2.22	$	1.78	$	5.26	$	4.21	Basic earnings per share attributable to AbbVie Inc.	$	1.00	$	2.22	$	2.27	$	5.26

Diluted EPS	Diluted EPS									Diluted EPS
Net earnings attributable to AbbVie Inc.	Net earnings attributable to AbbVie Inc.	$	3,949	$	3,179	$	9,363	$	7,498	Net earnings attributable to AbbVie Inc.	$	1,778	$	3,949	$	4,041	$	9,363
Earnings allocated to participating securities	Earnings allocated to participating securities	18		21		43		53		Earnings allocated to participating securities	11		18		32		43
Earnings available to common shareholders	Earnings available to common shareholders	$	3,931	$	3,158	$	9,320	$	7,445	Earnings available to common shareholders	$	1,767	$	3,931	$	4,009	$	9,320
Weighted-average shares of common stock outstanding	Weighted-average shares of common stock outstanding	1,771		1,770		1,771		1,769		Weighted-average shares of common stock outstanding	1,767		1,771		1,768		1,771
Effect of dilutive securities	Effect of dilutive securities	5		7		6		7		Effect of dilutive securities	4		5		4		6
Weighted-average diluted shares outstanding	Weighted-average diluted shares outstanding	1,776		1,777		1,777		1,776		Weighted-average diluted shares outstanding	1,771		1,776		1,772		1,777
Diluted earnings per share attributable to AbbVie Inc.	Diluted earnings per share attributable to AbbVie Inc.	$	2.21	$	1.78	$	5.24	$	4.19	Diluted earnings per share attributable to AbbVie Inc.	$	1.00	$	2.21	$	2.26	$	5.24

Certain shares issuable under stock-based compensation plans were excluded from the computation of EPS because the effect would have been antidilutive. The number of common shares excluded was insignificant for all periods presented.

Note 4 Licensing, Acquisitions and Other Arrangements

Other Licensing & Acquisitions Activity

Cash outflows related to acquisitions and investments totaled $670 million for the nine months ended September 30, 2023 and $494 million for the nine months ended September 30, ~~2022~~2022. AbbVie recorded acquired IPR&D and ~~$837~~milestones expense of $66 million for the three months and $496 million for the nine months ended September 30, ~~2021. AbbVie recorded acquired IPR&D~~2023 and ~~milestones expense of~~ $40 million for the three months and $454 million for the nine months ended September 30, ~~2022 and $402 million for the three months and $719 million for the nine months ended September 30, 2021.~~2022.

Syndesi Therapeutics SA

In February 2022, AbbVie acquired Syndesi Therapeutics SA and its portfolio of novel modulators of the synaptic vesicle protein 2A, including its lead molecule ABBV-552, previously named SDI-118, and accounted for the transaction as an asset acquisition. ~~SDI-118~~ABBV-552 is a small molecule, ~~currently in Phase 1b studies,~~ which is being evaluated to target nerve terminals to enhance synaptic efficiency. Under the terms of the agreement, AbbVie made an upfront payment of $130 million which was recorded to acquired IPR&D and milestones expense in the


~~2022 Form 10-Q~~ \|			7

condensed consolidated statement of earnings in the first quarter of 2022. The agreement also includes additional future payments of up to $870 million upon the achievement of certain development, regulatory and commercial milestones.

Juvise Pharmaceuticals

In June 2022, AbbVie and Laboratories Juvise Pharmaceuticals (Juvise) entered into an asset purchase agreement where Juvise acquired worldwide commercial rights of a mature brand Pylera, which is used for the treatment of peptic ulcers with an infection by the bacterium Helicobacter pylori. The transaction was accounted for as the sale of an asset. Upon completion of the transaction,


2023 Form 10-Q \|			7

AbbVie received net cash proceeds of $215 million and recognized a pre-tax gain of $172 million which was recorded in other operating income in the condensed consolidated statement of earnings in the second quarter of 2022.

~~DJS Antibodies Ltd~~Other Arrangements

~~Subsequent to September 30, 2022,~~ AbbVie entered into ~~an agreement~~several other arrangements resulting in charges related to ~~acquire DJS Antibodies Ltd (DJS) including its lead program DJS-002 and proprietary HEPTAD platform. DJS-002 is an LPAR1 antagonist antibody currently in preclinical studies~~upfront payments of $44 million for the ~~treatment of Idiopathic Pulmonary Fibrosis~~three months and other fibrotic diseases. HEPTAD platform is a potential novel approach to antibody discovery with specific capabilities targeting transmembrane protein targets. Under the terms of the agreement, AbbVie will make an upfront payment of approximately $255$396 million ~~plus additional future payments of up to $95 million upon achievement of certain development milestones.~~

~~Calico Life Sciences LLC~~

In July 2021, AbbVie and Calico Life Sciences LLC (Calico) entered into an extension of their collaboration to discover, develop and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer. This is the second collaboration extension and builds on the partnership established in 2014 and extended in 2018. Under the terms of the agreement, AbbVie and Calico will each contribute an additional $500 million and the term is extended for an additional three years. AbbVie’s contribution is payable in two equal installments beginning in 2023. Calico will be responsible for research and early development until 2025 and will advance collaboration projects into Phase 2a through 2030. Following completion of the Phase 2a studies, AbbVie will have the option to exclusively license the collaboration compounds. Upon exercise, AbbVie would be responsible for late-stage development and commercial activities. Collaboration costs and profits will be shared equally by both parties post option exercise. During the third quarter of 2021, AbbVie recorded $500 million as other operating expense in the condensed consolidated statement of earnings related to its commitments under the agreement.

~~TeneoOne and TNB-383B~~

~~In September 2021, AbbVie acquired TeneoOne, an affiliate of Teneobio, Inc., and TNB-383B, a BCMA-targeting immunotherapeutic~~ for the ~~potential treatment of relapsed or refractory multiple myeloma (R/R MM). In February 2019, AbbVie~~nine months ended September 30, 2023 and TeneoOne entered a strategic transaction to develop and commercialize TNB-383B, a bispecific antibody that simultaneously targets BCMA and CD3 and is designed to direct the body's own immune system to target and kill BCMA-expressing tumor cells. AbbVie exercised its exclusive right to acquire TeneoOne and TNB-383B based on an interim analysis of an ongoing Phase 1 study and accounted$40 million for the ~~transaction as an asset acquisition. Under~~three months and $262 million for the ~~terms of the agreement, AbbVie made an exercise payment of $400 million which was recorded to acquired~~nine months ended September 30, 2022. Acquired IPR&D and milestones expense ~~in the condensed consolidated statement of earnings in the third quarter of 2021. The agreement~~ also included ~~additional payments~~development milestones of ~~up to $250~~$22 million ~~upon~~for the ~~achievement of certain~~three months and $100 million for the nine months ended September 30, 2023 and $62 million for the nine months ended September 30, 2022. There were no development ~~regulatory and commercial milestones.~~milestones for the three months ended September 30, 2022.

Note 5 Collaborations

The company has ongoing transactions with other entities through collaboration agreements. The following represent the significant collaboration agreements impacting the periods ended September 30, ~~2022~~2023 and ~~2021.~~2022.

Collaboration with Janssen Biotech, Inc.

In December 2011, Pharmacyclics, a wholly-owned subsidiary of AbbVie, entered into a worldwide collaboration and license agreement with Janssen Biotech, Inc. and its affiliates (Janssen), one of the Janssen Pharmaceutical companies of Johnson & Johnson, for the joint development and commercialization of Imbruvica, a novel, orally active, selective covalent inhibitor of Bruton’s tyrosine kinase and certain compounds structurally related to Imbruvica, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States.


~~2022 Form 10-Q~~ \|			8

The collaboration provides Janssen with an exclusive license to commercialize Imbruvica outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $200 million to AbbVie. The collaboration also includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, Janssen is responsible for approximately 60% of collaboration development costs and AbbVie is responsible for the remaining 40% of collaboration development costs.

In the United States, both parties have co-exclusive rights to commercialize the products; however, AbbVie is the principal in the end-customer product sales. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Sales of Imbruvica are included in AbbVie's net revenues. Janssen's share of profits is included in AbbVie's cost of products sold. Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share.

Outside the United States, Janssen is responsible for and has exclusive rights to commercialize Imbruvica. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. AbbVie's share of profits is included in AbbVie's net revenues. Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share.

The following table shows the profit and cost sharing relationship between Janssen and AbbVie:


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
United States - Janssen's share of profits (included in cost of products sold)	United States - Janssen's share of profits (included in cost of products sold)	$	398	$	518	$	1,210	$	1,497	United States - Janssen's share of profits (included in cost of products sold)	$	316	$	398	$	925	$	1,210
International - AbbVie's share of profits (included in net revenues)	International - AbbVie's share of profits (included in net revenues)	286		265		868		816		International - AbbVie's share of profits (included in net revenues)	230		286		711		868
Global - AbbVie's share of other costs (included in respective line items)	Global - AbbVie's share of other costs (included in respective line items)	63		76		196		220		Global - AbbVie's share of other costs (included in respective line items)	59		63		171		196

AbbVie’s receivable from Janssen, included in accounts receivable, net, was ~~$296~~$253 million at September 30, ~~2022~~2023 and ~~$294~~$295 million at December 31, ~~2021.~~2022. AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was ~~$379~~$308 million at September 30, ~~2022~~2023 and ~~$509~~$379 million at December 31, ~~2021.~~2022.

Collaboration with Genentech, Inc.

AbbVie and Genentech, Inc. (Genentech), a member of the Roche Group, are parties to a collaboration and license agreement executed in 2007 to jointly research, develop and commercialize human therapeutic products containing BCL-2 inhibitors and certain other compound inhibitors which includes Venclexta, a BCL-2 inhibitor used to treat certain hematological malignancies. AbbVie


2023 Form 10-Q \|			8

shares equally with Genentech all pre-tax profits and losses from the development and commercialization of Venclexta in the United States. AbbVie pays royalties on Venclexta net revenues outside the United States.

AbbVie manufactures and distributes Venclexta globally and is the principal in the end-customer product sales. Sales of Venclexta are included in AbbVie’s net revenues. Genentech’s share of United States profits is included in AbbVie’s cost of products sold. AbbVie records sales and marketing costs associated with the United States collaboration as part of selling, general and administrative (SG&A) expenses and global development costs as part of research and development (R&D) expenses, net of Genentech’s share. Royalties paid for Venclexta revenues outside the United States are also included in AbbVie’s cost of products sold.

The following table shows the profit and cost sharing relationship between Genentech and AbbVie:


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
Genentech's share of profits, including royalties (included in cost of products sold)	Genentech's share of profits, including royalties (included in cost of products sold)	$	204	$	187	$	578	$	514	Genentech's share of profits, including royalties (included in cost of products sold)	$	225	$	204	$	641	$	578
AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A)	AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A)	10		10		27		29		AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A)	13		10		32		27
AbbVie's share of development costs (included in R&D)	AbbVie's share of development costs (included in R&D)	29		34		87		110		AbbVie's share of development costs (included in R&D)	24		29		82		87


~~2022 Form 10-Q~~ \|			9

Note 6 Goodwill and Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill:


(in millions)
Balance as of December 31, ~~2021~~2022	$	~~32,379~~32,156
Foreign currency translation adjustments	~~(653)~~(65)
Balance as of September 30, ~~2022~~2023	$	~~31,726~~32,091

The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist. As of September 30, ~~2022,~~2023, there were no accumulated goodwill impairment losses.

Intangible Assets, Net

The following table summarizes intangible assets:


		September 30, 2022						December 31, 2021							September 30, 2023						December 31, 2022
(in millions)	(in millions)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount		(in millions)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Definite-lived intangible assets	Definite-lived intangible assets													Definite-lived intangible assets
Developed product rights	Developed product rights	$	87,313	$	(23,368)	$	63,945	$	88,945	$	(18,463)	$	70,482	Developed product rights	$	76,526	$	(21,170)	$	55,356	$	87,698	$	(25,003)	$	62,695
License agreements	License agreements	8,486		(4,376)		4,110		8,487		(3,688)		4,799		License agreements	8,261		(5,299)		2,962		8,474		(4,642)		3,832
Total definite-lived intangible assets	Total definite-lived intangible assets	95,799		(27,744)		68,055		97,432		(22,151)		75,281		Total definite-lived intangible assets	84,787		(26,469)		58,318		96,172		(29,645)		66,527
Indefinite-lived intangible assets	Indefinite-lived intangible assets	670		—		670		670		—		670		Indefinite-lived intangible assets	285		—		285		912		—		912
Total intangible assets, net	Total intangible assets, net	$	96,469	$	(27,744)	$	68,725	$	98,102	$	(22,151)	$	75,951	Total intangible assets, net	$	85,072	$	(26,469)	$	58,603	$	97,084	$	(29,645)	$	67,439

Definite-Lived Intangible Assets

Amortization expense was $2.0 billion for the three months and $6.1 billion for the nine months ended September 30, 2023 and $2.0 billion for the three months and $5.7 billion for the nine months ended September 30, ~~2022 and $1.9 billion for the three months and $5.9 billion for the nine months ended September 30, 2021.~~2022. Amortization expense was included in cost of products sold in the condensed consolidated statements of earnings.

In August 2023, as part of the Inflation Reduction Act (IRA) of 2022, the company’s oncology product Imbruvica sold in the United States (U.S.) was included on the list of products selected for negotiation by the Centers for Medicare & Medicaid Services. The selection resulted in a significant decrease in the estimated future cash flows for the product and represented a triggering event


2023 Form 10-Q \|			9

which required the company to evaluate the underlying definite lived-intangible asset for impairment. The company utilized a discounted cash flow analysis to determine the fair value of $1.9 billion, which was lower than the carrying value of $4.0 billion and resulted in a partial impairment of both the gross and net carrying amount as of August 29, 2023. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $2.1 billion to cost of products sold in the condensed consolidated statement of earnings for the third quarter of 2023. The fair value measurement was based on Level 3 inputs including estimated net revenues, cost of products sold, R&D costs, selling and marketing costs and discount rate. The remaining intangible asset carrying value related to Imbruvica in the U.S. totaled $1.8 billion as of September 30, 2023.

In September 2022, the company made a strategic decision to reduce ongoing sales and marketing investment related to Vuity, an on-market product to treat presbyopia. This strategic decision contributed to a significant decrease in the estimated future cash flows for the product and represented a triggering event which required the company to evaluate the underlying definite lived-intangible asset for impairment. The company utilized a discounted cash flow analysis to estimate the fair value of the intangible asset resulting in a full impairment of both the gross and net carrying amount. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $770 million to cost of products sold in the condensed consolidated statement of earnings for the third quarter of 2022.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets represent ~~in-process research and development~~acquired IPR&D associated with products that have not yet received regulatory approval. The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist.

During the first quarter of 2023, the company made a decision to revise the research and development plan for AGN-151607, a novel investigational neurotoxin for the prevention of postoperative atrial fibrillation in cardiac surgery patients. This decision contributed to a delay in the estimated timing of regulatory approval as well as a significant decrease in estimated future cash flows of the product and represented a triggering event which required the company to evaluate the underlying indefinite-lived intangible asset for impairment. The company utilized a discounted cash flow analysis to estimate the fair value which was below the carrying value of the intangible asset. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $630 million to research and development expense in the condensed consolidated statement of earnings for the first quarter of 2023.

Note 7 Integration and Restructuring Plans

Allergan Integration Plan

Following the closing of the Allergan acquisition, AbbVie implemented an integration plan designed to reduce costs, integrate and optimize the combined ~~organization. To achieve these integration objectives, AbbVie expects to incur~~organization and incurred total cumulative charges of ~~approximately $2~~$2.5 billion through ~~2022.~~September 30, 2023. These costs consist of severance and employee benefit costs (cash severance, non-cash severance including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses.


~~2022 Form 10-Q~~ \|			10

The following table summarizes the charges (benefits) associated with the Allergan acquisition integration plan:


		Severance and employee benefits										Other integration
		Three months ended September 30,			Nine months ended September 30,						Three months ended September 30,		Nine months ended September 30,							Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)		2022		2021		2022		2021					2022		2021		2022			2021		(in millions)		2023		2022		2023		2022
Cost of products sold	Cost of products sold		$	—	$	2	$	(4)	$	8				$	24	$	44	$	85		$	84	Cost of products sold		$	20	$	24	$	66	$	81
Research and development	Research and development		1		—		2		—					3		18		12			87		Research and development		1		4		2		14
Selling, general and administrative	Selling, general and administrative		4		18		4		47					84		88		230			213		Selling, general and administrative		39		88		134		234
Total charges	Total charges		$	5	$	20	$	2	$	55				$	111	$	150	$	327		$	384	Total charges		$	60	$	116	$	202	$	329

The following table summarizes the cash activity in the recorded liability associated with the Allergan integration plan for the nine months ended September 30, ~~2022:~~2023:
(in millions) Severance and employee benefits Other integration
Accrued balance as of December 31, 2021 $ 222 $ 33
Charges 2 316
Payments and other adjustments (107) (343)
Accrued balance as of September 30, 2022 $ 117 $ 6


(in millions)
Accrued balance as of December 31, 2022	$	107
Charges	192
Payments and other adjustments	(258)
Accrued balance as of September 30, 2023	$	41


2023 Form 10-Q \|			10

Other Restructuring

AbbVie recorded restructuring charges of $10 million for the three months and $55 million for the nine months ended September 30, 2023 and $50 million for the three months and $143 million for the nine months ended September 30, ~~2022 and $13 million for the three months and $56 million for the nine months ended September 30, 2021.~~2022.

The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, ~~2022:~~2023:


(in millions)
Accrued balance as of December 31, ~~2021~~2022	$	33176
Restructuring charges	~~112~~31
Payments and other adjustments	~~(25)~~(64)
Accrued balance as of September 30, ~~2022~~2023	$	~~120~~143

Note 8 Financial Instruments and Fair Value Measures

Risk Management Policy

See Note 11 to the company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for a summary of AbbVie’s risk management policy and use of derivative instruments.

Financial Instruments

Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling ~~$1.8~~$2.5 billion at September 30, ~~2022~~2023 and ~~$1.1~~$1.7 billion at December 31, ~~2021,~~2022, are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than 18 months. Accumulated gains and losses as of September 30, ~~2022~~2023 are reclassified from accumulated other comprehensive income (loss) (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement.

In ~~the third quarter of~~ 2019, the company entered into treasury rate lock agreements with notional amounts totaling $10.0 billion to hedge exposure to variability in future cash flows resulting from changes in interest rates related to the issuance of long-term debt in connection with the acquisition of Allergan. The treasury rate lock agreements were designated as cash flow hedges and recorded at fair value. The agreements were net settled upon issuance of the senior notes in ~~November~~ 2019 and the resulting net gain was ~~recognized~~included in ~~other comprehensive loss.~~AOCI. This gain is reclassified to interest expense, net over the term of the related debt.


~~2022 Form 10-Q~~ \|			11

The company iswas a party to interest rate swap contracts designated as cash flow hedges ~~with notional amounts totaling $750 million at September 30, 2022 and December 31, 2021.~~that matured in November 2022. The effect of the hedge contracts iswas to change a floating-rate interest obligation to a fixed rate for that portion of the floating-rate debt. Realized and unrealized gains or losses ~~are~~were included in AOCI and ~~are~~ reclassified to interest expense, net over the lives of the floating-rate debt.

In June 2023, the company entered into a cross-currency swap contract with a notional amount totaling €433 million to hedge the company’s exposure to changes in future cash flows of foreign currency denominated debt related to changes in foreign exchange rates. The cross-currency swap contract was designated as a cash flow hedge and effectively converted the interest and principal payments of the related foreign currency denominated debt to U.S. dollars. The unrealized gains and losses on the contract are included in AOCI and are reclassified to net foreign exchange loss over the term of the related debt.

The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are reflected in net foreign exchange gain or loss in the condensed consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $6.8 billion at September 30, ~~2022~~2023 and ~~$8.2~~$6.5 billion at December 31, ~~2021.~~2022.

The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. The company had an aggregate principal amount of senior Euro notes designated as net investment hedges of €5.4 billion at September 30, 2023 and €5.9 billion at December 31, 2022. In addition, the company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling ~~€4.5~~€4.9 billion, SEK1.4 billion, CAD750 million and CHF50 million at September 30, ~~2022~~2023 and €4.3 billion, SEK2.0 billion, CAD750 million and CHF90 million at December 31, ~~2021. The company also had an aggregate principal amount of senior Euro notes designated as net investment hedges of €5.9 billion at September 30, 2022 and December 31, 2021.~~2022. The company uses the spot method of assessing hedge effectiveness for derivative instruments designated as net investment hedges. Realized and unrealized gains and losses from these hedges are included in AOCI


2023 Form 10-Q \|			11

and the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense, net over the life of the hedging instrument.

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling ~~$4.5~~$5.0 billion at September 30, ~~2022~~2023 and $4.5 billion at December 31, ~~2021.~~2022. The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.

No amounts are excluded from the assessment of effectiveness for cash flow hedges or fair value hedges.


2023 Form 10-Q \|			12

The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets:


		Fair value – Derivatives in asset position					Fair value – Derivatives in liability position						Fair value – Derivatives in asset position					Fair value – Derivatives in liability position
(in millions)	(in millions)	Balance sheet caption	September 30, 2022		December 31, 2021		Balance sheet caption	September 30, 2022		December 31, 2021		(in millions)	Balance sheet caption	September 30, 2023		December 31, 2022		Balance sheet caption	September 30, 2023		December 31, 2022
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts											Foreign currency forward exchange contracts
Designated as cash flow hedges	Designated as cash flow hedges	Prepaid expenses and other	$	153	$	51	Accounts payable and accrued liabilities	$	9	$	2	Designated as cash flow hedges	Prepaid expenses and other	$	90	$	49	Accounts payable and accrued liabilities	$	3	$	8
Designated as cash flow hedges	Designated as cash flow hedges	Other assets	1		—		Other long-term liabilities	—		—		Designated as cash flow hedges	Other assets	—		1		Other long-term liabilities	—		—
Designated as net investment hedges	Designated as net investment hedges	Prepaid expenses and other	70		149		Accounts payable and accrued liabilities	—		—		Designated as net investment hedges	Prepaid expenses and other	32		6		Accounts payable and accrued liabilities	29		36
Designated as net investment hedges	Designated as net investment hedges	Other assets	283		15		Other long-term liabilities	—		—		Designated as net investment hedges	Other assets	157		74		Other long-term liabilities	9		47
Not designated as hedges	Not designated as hedges	Prepaid expenses and other	60		26		Accounts payable and accrued liabilities	86		13		Not designated as hedges	Prepaid expenses and other	30		33		Accounts payable and accrued liabilities	49		41
Cross-currency swap contracts												Cross-currency swap contracts
Designated as cash flow hedges												Designated as cash flow hedges	Prepaid expenses and other	—		—		Accounts payable and accrued liabilities	5		—
Interest rate swap contracts	Interest rate swap contracts											Interest rate swap contracts
Designated as cash flow hedges		Prepaid expenses and other	2		—		Accounts payable and accrued liabilities	—		7
Designated as fair value hedges	Designated as fair value hedges	Prepaid expenses and other	—		—		Accounts payable and accrued liabilities	21		—		Designated as fair value hedges	Prepaid expenses and other	—		—		Accounts payable and accrued liabilities	2		17
Designated as fair value hedges	Designated as fair value hedges	Other assets	—		26		Other long-term liabilities	393		15		Designated as fair value hedges	Other assets	—		—		Other long-term liabilities	434		375
Total derivatives	Total derivatives		$	569	$	267		$	509	$	37	Total derivatives		$	309	$	163		$	531	$	524

While certain derivatives are subject to netting arrangements with the company’s counterparties, the company does not offset derivative assets and liabilities within the condensed consolidated balance sheets.


~~2022 Form 10-Q~~ \|			12

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive loss:


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts									Foreign currency forward exchange contracts
Designated as cash flow hedges	Designated as cash flow hedges	$	124	$	43	$	171	$	67	Designated as cash flow hedges	$	76	$	124	$	81	$	171
Designated as net investment hedges	Designated as net investment hedges	362		101		748		186		Designated as net investment hedges	241		362		153		748
Cross-currency swap contracts designated as cash flow hedges										Cross-currency swap contracts designated as cash flow hedges	(14)		—		(5)		—
Interest rate swap contracts designated as cash flow hedges	Interest rate swap contracts designated as cash flow hedges	—		(1)		6		—		Interest rate swap contracts designated as cash flow hedges	—		—		—		6

Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax gains of ~~$150~~$74 million into cost of products sold for foreign currency cash flow hedges, pre-tax gains of $2$1 million into ~~interest expense,~~ net foreign exchange loss for ~~interest rate~~cross-currency swap cash flow hedges and pre-tax gains of $24 million into interest expense, net for treasury rate lock agreement cash flow hedges during the next 12 months.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive loss pre-tax gains of $173 million for the three months and pre-tax gains of $47 million for the nine months ended September 30, 2023 and pre-tax gains of $431 million for the three months and pre-tax gains of $932 million for the nine months ended September 30, ~~2022 and pre-tax gains of $141 million for the three months and pre-tax gains of $397 million for the nine months ended September 30, 2021.~~2022.


2023 Form 10-Q \|			13

The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings, including the net gains (losses) reclassified out of AOCI into net earnings. See Note 10 for the amount of net gains (losses) reclassified out of AOCI.


			Three months ended September 30,				Nine months ended September 30,						Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	Statement of earnings caption	2022		2021		2022		2021		(in millions)	Statement of earnings caption	2023		2022		2023		2022
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts										Foreign currency forward exchange contracts
Designated as cash flow hedges	Designated as cash flow hedges	Cost of products sold	$	21	$	(28)	$	47	$	(62)	Designated as cash flow hedges	Cost of products sold	$	11	$	21	$	67	$	47
Designated as net investment hedges	Designated as net investment hedges	Interest expense, net	29		7		67		16		Designated as net investment hedges	Interest expense, net	28		29		85		67
Not designated as hedges	Not designated as hedges	Net foreign exchange loss	(121)		(25)		(285)		(53)		Not designated as hedges	Net foreign exchange loss	(41)		(121)		(7)		(285)
Treasury rate lock agreements designated as cash flow hedges	Treasury rate lock agreements designated as cash flow hedges	Interest expense, net	6		6		18		18		Treasury rate lock agreements designated as cash flow hedges	Interest expense, net	6		6		18		18
Cross-currency swap contracts designated as cash flow hedges											Cross-currency swap contracts designated as cash flow hedges	Net foreign exchange loss	(14)		—		(6)		—
Interest rate swap contracts	Interest rate swap contracts										Interest rate swap contracts
Designated as cash flow hedges	Designated as cash flow hedges	Interest expense, net	—		(6)		(3)		(20)		Designated as cash flow hedges	Interest expense, net	—		—		—		(3)
Designated as fair value hedges	Designated as fair value hedges	Interest expense, net	(141)		(5)		(424)		(73)		Designated as fair value hedges	Interest expense, net	(58)		(141)		(44)		(424)
Debt designated as hedged item in fair value hedges	Debt designated as hedged item in fair value hedges	Interest expense, net	141		5		424		73		Debt designated as hedged item in fair value hedges	Interest expense, net	58		141		44		424

Fair Value Measures

The fair value hierarchy consists of the following three levels:

•Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access;

•Level 2 – Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and

•Level 3 – Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company’s management about the assumptions market participants would use in pricing the asset or liability.


			Basis of fair value measurement
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Cash and equivalents	$	13,287	$	5,531	$	7,756	$	—
Money market funds and time deposits	10		—		10		—
Debt securities	28		—		28		—
Equity securities	109		86		23		—


Foreign currency contracts	309		—		309		—

Total assets	$	13,743	$	5,617	$	8,126	$	—
Liabilities
Interest rate swap contracts	$	436	$	—	$	436	$	—
Cross-currency swap contracts	5		—		5		—
Foreign currency contracts	90		—		90		—
Contingent consideration	18,674		—		—		18,674
Total liabilities	$	19,205	$	—	$	531	$	18,674


~~2022~~2023 Form 10-Q \|			1314

The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of ~~September 30, 2022:~~
Basis of fair value measurement
(in millions) Total Quoted prices in active markets for identical assets
(Level 1) Significant other observable
inputs
(Level 2) Significant unobservable inputs
(Level 3)
Assets
Cash and equivalents $ 11,832 $ 4,303 $ 7,529 $ —
Money market funds and time deposits 36 — 36 —
Debt securities 31 — 31 —
Equity securities 72 50 22 —
Interest rate swap contracts 2 — 2 —
Foreign currency contracts 567 — 567 —
Total assets $ 12,540 $ 4,353 $ 8,187 $ —
Liabilities
Interest rate swap contracts $ 414 $ — $ 414 $ —
Foreign currency contracts 95 — 95 —
Contingent consideration 14,556 — — 14,556
Total liabilities $ 15,065 $ — $ 509 $ 14,556

~~The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of~~ December 31, ~~2021:~~2022:


				Basis of fair value measurement									Basis of fair value measurement
(in millions)	(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets	Assets									Assets
Cash and equivalents	Cash and equivalents	$	9,746	$	4,451	$	5,295	$	—	Cash and equivalents	$	9,201	$	4,201	$	5,000	$	—
Money market funds and time deposits	Money market funds and time deposits	45		—		45		—		Money market funds and time deposits	21		—		21		—
Debt securities	Debt securities	46		—		46		—		Debt securities	28		—		28		—
Equity securities	Equity securities	121		100		21		—		Equity securities	91		59		32		—
Interest rate swap contracts		26		—		26		—
Foreign currency contracts	Foreign currency contracts	241		—		241		—		Foreign currency contracts	163		—		163		—

Total assets	Total assets	$	10,225	$	4,551	$	5,674	$	—	Total assets	$	9,504	$	4,260	$	5,244	$	—
Liabilities	Liabilities									Liabilities
Interest rate swap contracts	Interest rate swap contracts	$	22	$	—	$	22	$	—	Interest rate swap contracts	$	392	$	—	$	392	$	—
Foreign currency contracts	Foreign currency contracts	15		—		15		—		Foreign currency contracts	132		—		132		—

Contingent consideration	Contingent consideration	14,887		—		—		14,887		Contingent consideration	16,384		—		—		16,384
Total liabilities	Total liabilities	$	14,924	$	—	$	37	$	14,887	Total liabilities	$	16,908	$	—	$	524	$	16,384

Money market funds and time deposits are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves. Equity securities primarily consist of investments for which the fair values were determined by using the published market ~~price~~prices per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company were valued using observable market inputs including published interest rate curves and both forward and spot prices for foreign currencies.

The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs, including the discount rate, estimated probabilities and timing of achieving specified development, regulatory and commercial milestones and the estimated amount of future sales of the acquired products. ~~Potential~~The potential contingent consideration payments are estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which are then discounted to present value. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of


~~2022 Form 10-Q~~ \|			14

achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of certain of these inputs. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period.

The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
(in millions)	(in millions)	Range	Weighted average(a)	Range	Weighted average(a)	(in millions)	Range	Weighted average(a)	Range	Weighted average(a)
Discount rate	Discount rate	4.1% - 5.5%	5.0%	0.2%- 2.6%	1.7%	Discount rate	5.3% - 6.1%	5.5%	4.7%- 5.1%	4.8%
Probability of payment for unachieved milestones	Probability of payment for unachieved milestones	89% - 100%	91%	89% - 100%	90%	Probability of payment for unachieved milestones	100% - 100%	100%	100% - 100%	100%
Probability of payment for royalties by indication(b)	Probability of payment for royalties by indication(b)	56% - 100%	98%	56% - 100%	96%	Probability of payment for royalties by indication(b)	89% - 100%	99%	56% - 100%	99%

Projected year of payments	Projected year of payments	2022 - 2034	2027	2022 - 2034	2027	Projected year of payments	2023 - 2034	2027	2023 - 2034	2028

(a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.

(b) Excluding approved indications, the estimated probability of payment ~~ranged from 56% to~~was 89% at September 30, ~~2022~~2023 and 56% at December 31, ~~2021.~~2022.


2023 Form 10-Q \|			15

There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy. The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs:


		Nine months ended September 30,					Nine months ended September 30,
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Beginning balance	Beginning balance	$	14,887	$	12,997	Beginning balance	$	16,384	$	14,887
Change in fair value recognized in net earnings	Change in fair value recognized in net earnings	647		2,447		Change in fair value recognized in net earnings	3,432		647
Payments	Payments	(978)		(525)		Payments	(1,142)		(978)
Ending balance	Ending balance	$	14,556	$	14,919	Ending balance	$	18,674	$	14,556

The change in fair value recognized in net earnings is recorded in other expense (income), net in the condensed consolidated statements of earnings. Contingent consideration payments of amounts up to the initial acquisition date fair value are classified as cash outflows from financing activities and payments of amounts in excess of the initial acquisition date fair value are classified as cash outflows from operating activities in the condensed consolidated statements of cash flows.

Certain financial instruments are carried at historical cost or some basis other than fair value. The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, ~~2022~~2023 are shown in the table below:

Basis of fair value measurement
(in millions) Book value Approximate fair value Quoted prices in active markets for identical assets
(Level 1) Significant other
observable inputs
(Level 2) Significant unobservable inputs
(Level 3)
Liabilities
Short-term borrowings $ 10 $ 10 $ — $ 10 $ —
Current portion of long-term debt and finance lease obligations, excluding fair value hedges 9,215 9,191 9,071 120 —
Long-term debt and finance lease obligations, excluding fair value hedges 60,740 53,834 53,093 741 —
Total liabilities $ 69,965 $ 63,035 $ 62,164 $ 871 $ —


~~2022 Form 10-Q~~ \|			15


					Basis of fair value measurement
(in millions)	Book value		Approximate fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)



Liabilities
Short-term borrowings	$	2	$	2	$	—	$	2	$	—
Current portion of long-term debt and finance lease obligations, excluding fair value hedges	5,113		5,041		4,763		278		—
Long-term debt and finance lease obligations, excluding fair value hedges	56,035		49,633		49,124		509		—
Total liabilities	$	61,150	$	54,676	$	53,887	$	789	$	—

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, ~~2021~~2022 are shown in the table below:


						Basis of fair value measurement											Basis of fair value measurement
(in millions)	(in millions)	Book value		Approximate fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		(in millions)	Book value		Approximate fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Liabilities	Liabilities											Liabilities
Short-term borrowings	Short-term borrowings	$	14	$	14	$	—	$	14	$	—	Short-term borrowings	$	1	$	1	$	—	$	1	$	—
Current portion of long-term debt and finance lease obligations, excluding fair value hedges	Current portion of long-term debt and finance lease obligations, excluding fair value hedges	12,455		11,830		11,329		501		—		Current portion of long-term debt and finance lease obligations, excluding fair value hedges	4,152		4,121		3,930		191		—
Long-term debt and finance lease obligations, excluding fair value hedges	Long-term debt and finance lease obligations, excluding fair value hedges	64,113		71,810		70,757		1,053		—		Long-term debt and finance lease obligations, excluding fair value hedges	59,463		54,073		53,365		708		—
Total liabilities	Total liabilities	$	76,582	$	83,654	$	82,086	$	1,568	$	—	Total liabilities	$	63,616	$	58,195	$	57,295	$	900	$	—

AbbVie also holds investments in equity securities that do not have readily determinable fair values. The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur. The carrying amount of these investments was ~~$143~~$131 million as of September 30, ~~2022~~2023 and ~~$149~~$129 million as of December 31, ~~2021.~~2022. No significant cumulative upward or downward adjustments have been recorded for these investments as of September 30, ~~2022.~~2023.


2023 Form 10-Q \|			16

Concentrations of Risk

Of total net accounts receivable, three U.S. wholesalers accounted for ~~79%~~81% as of September 30, ~~2022~~2023 and ~~75%~~82% as of December 31, ~~2021,~~2022, and substantially all of AbbVie’s pharmaceutical product net revenues in the United States were to these three wholesalers.

Humira (adalimumab) is AbbVie’s single largest product and accounted for approximately ~~36%~~28% of AbbVie’s total net revenues for the nine months ended September 30, ~~2022~~2023 and ~~37%~~36% for the nine months ended September 30, ~~2021.~~2022.

Debt and Credit Facilities

Long-Term Debt

In January 2023, the company repaid a $1.0 billion floating rate three-year term loan that was scheduled to mature in May 2023. In March 2023, the company repaid a $350 million aggregate principal amount of 2.80% senior notes at maturity.

In May 2023, the company repaid $1.0 billion aggregate principal amount of 2.85% senior notes at maturity.

In January 2022, the company repaid $2.9 billion aggregate principal amount of 3.45% senior notes that were scheduled to mature in March 2022. This repayment was made by exercising, under the terms of the notes, 60-day early redemption at 100% of the principal amount.

In February 2022, the company refinanced its $2.0 billion floating rate five-year term loan. As part of the refinancing, the company repaid the existing $2.0 billion term loan due May 2025 and borrowed $2.0 billion under a new term loan at a lower floating rate. All other significant terms of the loan, including the maturity date, remained unchanged after the refinancing.

In July 2022, the company repaid $1.7 billion aggregate principal amount of 3.25% senior notes that were scheduled to mature in October 2022. This repayment was made by exercising, under the terms of the notes, 90-day early redemption at 100% of the principal amount.

In September 2022, the company repaid $1.0 billion aggregate principal amount of 3.2% senior notes that were scheduled to mature in November 2022. This payment was made by exercising, under the terms of the notes, 60-day early redemption at 100% of the principal amount.

In April 2021, the company repaid $1.8 billion aggregate principal amount of 2.3% senior notes that were scheduled to mature in May 2021. In May 2021, the company repaid €750 million aggregate principal amount of 0.5% senior euro notes that were scheduled to mature in June 2021. These repayments were made by exercising, under the terms of the notes, 30-day early redemptions at 100% of the principal amounts. The company also repaid $750 million aggregate principal amount of floating rate senior notes at maturity in May 2021.Short-Term Borrowings

In ~~September 2021,~~March 2023, AbbVie entered into an amended and restated five-year revolving credit facility. The amendment increased the ~~company refinanced its $1.0~~unsecured revolving credit facility commitments from $4.0 billion ~~floating rate three-year term loan. As part of the refinancing, the company repaid the existing $1.0~~to $5.0 billion ~~term loan due May 2023~~ and ~~borrowed $1.0 billion under a new term loan at a lower floating rate. All other significant terms of the loan, including~~extended the maturity date ~~remained unchanged after~~of the ~~refinancing.~~

~~In September 2021,~~facility from August 2023 to March 2028. This amended facility enables the company ~~repaid $1.2 billion aggregate principal amount of 5.0% senior notes that were scheduled~~ to ~~mature~~borrow funds on an unsecured basis at variable interest rates and contains various covenants. At September 30, 2023, the company was in ~~December 2021. This repayment was made by exercising,~~compliance with all covenants, and commitment fees under the ~~terms~~credit facility were insignificant. No amounts were outstanding under the company's credit facilities as of ~~the notes, 90-day early redemption at 100% of the principal amount.~~September 30, 2023 and December 31, 2022.


~~2022 Form 10-Q~~ \|			16

Note 9 Post-Employment Benefits

The following table summarizes net periodic benefit cost relating to the company’s defined benefit and other post-employment plans:


		Defined benefit plans								Other post- employment plans									Defined benefit plans								Other post- employment plans
		Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		2022		2021		2022		2021		(in millions)	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	Service cost	$	113	$	110	$	342	$	331	$	13	$	12	$	38	$	36	Service cost	$	68	$	113	$	203	$	342	$	9	$	13	$	27	$	38
Interest cost	Interest cost	74		59		223		177		6		5		18		14		Interest cost	108		74		324		223		9		6		28		18
Expected return on plan assets	Expected return on plan assets	(177)		(166)		(536)		(498)		—		—		—		—		Expected return on plan assets	(181)		(177)		(543)		(536)		—		—		—		—
Amortization of prior service cost (credit)	Amortization of prior service cost (credit)	1		1		2		2		(10)		(10)		(29)		(29)		Amortization of prior service cost (credit)	—		1		1		2		(9)		(10)		(27)		(29)
Amortization of actuarial loss	Amortization of actuarial loss	57		72		173		217		7		8		20		24		Amortization of actuarial loss	4		57		12		173		3		7		9		20
Net periodic benefit cost		$	68	$	76	$	204	$	229	$	16	$	15	$	47	$	45
Net periodic benefit cost (credit)																		Net periodic benefit cost (credit)	$	(1)	$	68	$	(3)	$	204	$	12	$	16	$	37	$	47

The components of net periodic benefit cost other than service cost are included in other expense (income), net in the condensed consolidated statements of earnings.


2023 Form 10-Q \|			17

Note 10 Equity

Stock-Based Compensation

~~In May 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (the Amended Plan), which amends and restates the AbbVie 2013 Incentive Stock Program.~~ Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and the AbbVie Amended ~~Plan~~and Restated 2013 Incentive Stock Program and is summarized as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2023		2022		2023		2022
Cost of products sold	Cost of products sold	$	8	$	9	$	33	$	39	Cost of products sold	$	9	$	8	$	38	$	33
Research and development	Research and development	47		47		194		181		Research and development	53		47		227		194
Selling, general and administrative	Selling, general and administrative	71		79		312		343		Selling, general and administrative	68		71		357		312
Pre-tax compensation expense	Pre-tax compensation expense	126		135		539		563		Pre-tax compensation expense	130		126		622		539
Tax benefit	Tax benefit	25		27		102		101		Tax benefit	(26)		(25)		(111)		(102)
After-tax compensation expense	After-tax compensation expense	$	101	$	108	$	437	$	462	After-tax compensation expense	$	104	$	101	$	511	$	437

Stock Options

During the nine months ended September 30, ~~2022,~~2023, primarily in connection with the company's annual grant, AbbVie granted ~~0.9~~0.6 million stock options with a weighted-average grant-date fair value of ~~$22.83.~~$29.89. As of September 30, ~~2022, $8~~2023, $7 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years.

RSUs and Performance Shares

During the nine months ended September 30, ~~2022,~~2023, primarily in connection with the company's annual grant, AbbVie granted ~~5.9~~5.8 million RSUs and performance shares with a weighted-average grant-date fair value of ~~$146.30.~~$149.59. As of September 30, ~~2022,~~2023, $692 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years.


~~2022 Form 10-Q~~ \|			17

Cash Dividends

The following table summarizes quarterly cash dividends declared during ~~2022~~2023 and ~~2021:~~2022:
2022 2021
Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share
10/28/22 02/15/23 $ 1.48 10/29/21 02/15/22 $ 1.41
09/09/22 11/15/22 $ 1.41 09/10/21 11/15/21 $ 1.30
06/23/22 08/15/22 $ 1.41 06/17/21 08/16/21 $ 1.30
02/17/22 05/16/22 $ 1.41 02/18/21 05/14/21 $ 1.30


2023				2022
Date Declared	Payment Date	Dividend Per Share		Date Declared	Payment Date	Dividend Per Share
10/26/23	02/15/24	$	1.55	10/28/22	02/15/23	$	1.48
09/08/23	11/15/23	$	1.48	09/09/22	11/15/22	$	1.41
06/22/23	08/15/23	$	1.48	06/23/22	08/15/22	$	1.41
02/16/23	05/15/23	$	1.48	02/17/22	05/16/22	$	1.41

Stock Repurchase Program

The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management's discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under this program are recorded at acquisition cost, including related expenses, and are available for general corporate purposes.

On February 16, 2023, AbbVie’s board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization. AbbVie repurchased 10 million shares for $1.6 billion during the nine months ended September 30, 2023 and 8 million shares for $1.1 billion during the nine months ended September 30, ~~2022 and 5 million shares for $550 million during the nine months ended September 30, 2021.~~2022. AbbVie's remaining stock repurchase authorization was approximately ~~$1.4~~$4.8 billion as of September 30, ~~2022.~~2023.


2023 Form 10-Q \|			18

Accumulated Other Comprehensive Loss

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2023:


(in millions)	Foreign currency translation adjustments		Net investment hedging activities		Pension and post-employment benefits		Cash flow hedging activities		Total
Balance as of December 31, 2022	$	(1,513)	$	464	$	(1,458)	$	308	$	(2,199)
Other comprehensive income (loss) before reclassifications	(279)		156		43		61		(19)
Net gains reclassified from accumulated other comprehensive loss	—		(67)		(5)		(63)		(135)
Net current-period other comprehensive income (loss)	(279)		89		38		(2)		(154)
Balance as of September 30, 2023	$	(1,792)	$	553	$	(1,420)	$	306	$	(2,353)

Other comprehensive loss for the nine months ended September 30, 2023 included foreign currency translation adjustments totaling a loss of $279 million principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets and the offsetting impact of net investment hedging activities totaling a gain of $89 million.

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2022:


(in millions)	Foreign currency translation adjustments		Net investment hedging activities		Pension and post-employment benefits		Cash flow hedging activities		Total
Balance as of December 31, 2021	$	(570)	$	(91)	$	(2,546)	$	308	$	(2,899)
Other comprehensive income (loss) before reclassifications	(2,043)		1,318		6		151		(568)
Net losses (gains) reclassified from accumulated other comprehensive loss	—		(53)		130		(53)		24
Net current-period other comprehensive income (loss)	(2,043)		1,265		136		98		(544)
Balance as of September 30, 2022	$	(2,613)	$	1,174	$	(2,410)	$	406	$	(3,443)

Other comprehensive loss for the nine months ended September 30, 2022 included foreign currency translation adjustments totaling a loss of $2.0 billion ~~and the offsetting impact of net investment hedging activities totaling a gain of $1.3 billion, which were~~ principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated ~~assets.~~

~~The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2021:~~
(in millions) Foreign currency
translation adjustments
Net investment
hedging activities
Pension
and post-employment
benefits Cash flow hedging
activities Total
Balance as of December 31, 2020 $ 583 $ (790) $ (3,067) $ 157 $ (3,117)
Other comprehensive income (loss) before reclassifications (794) 457 27 60 (250)
Net losses (gains) reclassified from accumulated other comprehensive loss — (13) 169 55 211
Net current-period other comprehensive income (loss) (794) 444 196 115 (39)
Balance as of September 30, 2021 $ (211) $ (346) $ (2,871) $ 272 $ (3,156)

~~Other comprehensive loss for the nine months ended September 30, 2021 included foreign currency translation adjustments totaling a loss of $794 million~~assets and the offsetting impact of net investment hedging activities totaling a gain of ~~$444 million, which were principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets.~~$1.3 billion.


~~2022~~2023 Form 10-Q \|			1819

The following table presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss:


		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
(in millions) (brackets denote gains)	(in millions) (brackets denote gains)	2022		2021		2022		2021		(in millions) (brackets denote gains)	2023		2022		2023		2022
Net investment hedging activities	Net investment hedging activities									Net investment hedging activities
Gains on derivative amount excluded from effectiveness testing(a)	Gains on derivative amount excluded from effectiveness testing(a)	$	(29)	$	(7)	$	(67)	$	(16)	Gains on derivative amount excluded from effectiveness testing(a)	$	(28)	$	(29)	$	(85)	$	(67)
Tax expense	Tax expense	6		1		14		3		Tax expense	6		6		18		14
Total reclassifications, net of tax	Total reclassifications, net of tax	$	(23)	$	(6)	$	(53)	$	(13)	Total reclassifications, net of tax	$	(22)	$	(23)	$	(67)	$	(53)
Pension and post-employment benefits	Pension and post-employment benefits									Pension and post-employment benefits
Amortization of actuarial losses and other(b)	Amortization of actuarial losses and other(b)	$	55	$	71	$	166	$	214	Amortization of actuarial losses and other(b)	$	(2)	$	55	$	(5)	$	166
Tax benefit	Tax benefit	(12)		(15)		(36)		(45)		Tax benefit	—		(12)		—		(36)
Total reclassifications, net of tax	Total reclassifications, net of tax	$	43	$	56	$	130	$	169	Total reclassifications, net of tax	$	(2)	$	43	$	(5)	$	130
Cash flow hedging activities	Cash flow hedging activities									Cash flow hedging activities
Losses (gains) on foreign currency forward exchange contracts(c)		$	(21)	$	28	$	(47)	$	62
Gains on foreign currency forward exchange contracts(c)										Gains on foreign currency forward exchange contracts(c)	$	(11)	$	(21)	$	(67)	$	(47)
Gains on treasury rate lock agreements(a)	Gains on treasury rate lock agreements(a)	(6)		(6)		(18)		(18)		Gains on treasury rate lock agreements(a)	(6)		(6)		(18)		(18)
Losses on cross-currency swap contracts(d)										Losses on cross-currency swap contracts(d)	14		—		6		—
Losses on interest rate swap contracts(a)	Losses on interest rate swap contracts(a)	—		6		3		20		Losses on interest rate swap contracts(a)	—		—		—		3
Tax expense (benefit)		4		(4)		9		(9)
Tax expense										Tax expense	2		4		16		9
Total reclassifications, net of tax	Total reclassifications, net of tax	$	(23)	$	24	$	(53)	$	55	Total reclassifications, net of tax	$	(1)	$	(23)	$	(63)	$	(53)

(a) Amounts are included in interest expense, net (see Note 8).

(b) Amounts are included in the computation of net periodic benefit cost (see Note 9).

(d) Amounts are included in net foreign exchange loss (see Note 8).

Note 11 Income Taxes

The effective tax rate was 9% for the three months and 20% for the nine months ended September 30, 2023 compared to 10% for the three months and 11% for the nine months ended September 30, ~~2022 compared to 14% for the three and nine months ended September 30, 2021~~. 2022. The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to the impact of foreign operations which reflects the impact of lower income tax rates in locations outside the United States ~~tax incentives in Puerto Rico~~ and ~~other foreign tax jurisdictions,~~ business development ~~activities~~activities. The effective tax rate for the nine months ended September 30, 2023 and ~~accretion on~~September 30, 2022 and the three months ended September 30, 2022 were also impacted by changes in fair value of contingent consideration. The ~~decrease~~increase in the effective tax rate for the ~~three and~~ nine months ended September 30, ~~2022~~2023 over the prior year was primarily due to ~~differences~~changes in ~~the company’s jurisdictional mix~~fair value of ~~earnings, accretion on~~ contingent ~~consideration, and acquired IPR&D and milestones.~~consideration.

Due to the potential for resolution of federal, state and foreign examinations and the expiration of various statutes of limitations, it is reasonably possible ~~that~~ the company’s gross unrecognized tax benefits balance may change within the next 12 months by up to ~~$141~~$620 million.


2023 Form 10-Q \|			20

Note 12 Legal Proceedings and Contingencies

AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. The most significant matters are described below. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. For litigation matters discussed below for which a loss is probable or reasonably possible, the company is unable to estimate the possible loss or range of loss, if any, beyond the amounts accrued. Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows.

Subject to certain exceptions specified in the separation agreement by and between Abbott Laboratories (Abbott) and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the


~~2022 Form 10-Q~~ \|			19

distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters.

Antitrust Litigation

Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie) and a generic company ~~violates~~violated federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. The lawsuits pending in federal court consist of ~~four~~six individual plaintiff lawsuits and ~~two consolidated purported~~a certified class ~~actions: one brought~~action by Niaspan direct ~~purchasers and one brought by Niaspan end-payors.~~purchasers. The cases are pending in the United States District Court for the Eastern District of Pennsylvania for coordinated or consolidated pre-trial proceedings under the MDL Rules as In re: Niaspan Antitrust Litigation, MDL No. 2460. ~~In August 2019, the court certified a class of direct purchasers of Niaspan. In June 2020 and August 2021, the court denied the end-payors' motion to certify a class.~~ In October 2016, the Orange County, California District Attorney’s Office filed a lawsuit on behalf of the State of California regarding the Niaspan patent litigation settlement in Orange County Superior Court, asserting a claim under the unfair competition provision of the California Business and Professions Code seeking injunctive relief, restitution, civil penalties and attorneys’ fees.

In August 2019, direct purchasers of AndroGel filed a lawsuit, King Drug Co. of Florence, Inc., et al. v. AbbVie Inc., et al., against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, alleging that 2006 patent litigation settlements and related agreements by Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) with three generic companies violated federal antitrust law, and also alleging that 2011 patent litigation by Abbott with two generic companies regarding AndroGel was sham litigation and the settlements of those litigations violated federal antitrust law. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys’ fees. In ~~May 2020, Perrigo Company and related entities~~November 2022, the State of Oregon filed a lawsuit against AbbVie and others, alleging that Abbott’s 2011 AndroGel patent lawsuit filed against Perrigo was sham litigation. In September 2021, the United States District Court for the District of New Jersey granted AbbVie's motion for judgment on the pleadings in the ~~Perrigo lawsuit, dismissing it with prejudice. The United States~~Multnomah County, Oregon Circuit Court ~~of Appeals for~~making similar allegations regarding the ~~Third Circuit affirmed that dismissal in July 2022 and denied Perrigo’s petition for rehearing in August 2022.~~

Between March and May 2019, 12 putative class action lawsuits were filed in the United States District Court for the Northern District of Illinois by indirect Humira purchasers, alleging that AbbVie’s settlements with biosimilar manufacturers and AbbVie’s Humira2011 patent ~~portfolio violated state and federal antitrust laws. The court consolidated these lawsuits as~~ ~~In re: Humira (Adalimumab) Antitrust Litigation. In June 2020, the court dismissed the consolidated~~ litigation with ~~prejudice. In August 2022,~~one of the ~~United States Court of Appeals for the Seventh Circuit affirmed that dismissal.~~generic companies.

Lawsuits are pending against Forest Laboratories, LLC, an AbbVie subsidiary, and others generally alleging that 2009 and 2010 patent litigation settlements involving Namenda entered into between Forest and generic companies and other conduct by Forest involving Namenda, violated state antitrust, unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys’ fees. The lawsuits, purported class actionswere filed ~~by indirect purchasers of Namenda, are consolidated as~~ ~~In re: Namenda Indirect Purchaser Antitrust Litigation~~ ~~in the United States District Court for the Southern District of New York. In October 2022, the parties reached an agreement in principle to settle this matter.~~

Lawsuits are pending against Allergan Inc., an Allergan subsidiary, generally alleging that Allergan’s petitioning to the U.S. Patent Office and Food and Drug Administration and other conduct by Allergan involving Restasis violated federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages, injunctive relief and attorneys’ fees. The lawsuits, certified as a class action filed on behalf of indirect purchasers of Restasis, are consolidated for pre-trial purposes in the United States District Court for the Eastern District of New York under the MDL Rules as In re: Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litigation, MDL No. 2819. In August 2022, the court granted final approval to the parties’ agreement to settle this matter.

~~Lawsuits are pending~~ against Forest Laboratories, LLC and others generally alleging that 2012 and 2013 patent litigation settlements involving Bystolic with six generic manufacturers violated federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys’ fees. The lawsuits, purported class actions filed on behalf of direct and indirect purchasers of Bystolic, ~~are~~were consolidated as In re: Bystolic Antitrust Litigation in the United States District Court for the Southern District of New York. In February 2023, the court granted Forest Laboratories’ motion to dismiss the cases, dismissing them with prejudice. Plaintiffs are appealing the court’s motion to dismiss ruling.

Government Proceedings

Lawsuits are pending against Allergan and several other manufacturers generally alleging that they improperly promoted and sold prescription opioid products. Approximately ~~3,083 matters~~610 lawsuits are pending against ~~Allergan. The~~Allergan in federal and state courts. Most of the federal court ~~cases~~lawsuits are consolidated for


~~2022 Form 10-Q~~ \|			20

pre-trial purposes in the United States District Court for the Northern District of Ohio under the MDL rules as In re: National Prescription Opiate Litigation, MDL No. 2804. Approximately ~~284 matters~~160 of the lawsuits are pending in various state courts. The plaintiffs in these ~~cases,~~lawsuits, which include states, counties, cities, other municipal entities, Native American tribes, union trust funds and other third-party payors, private hospitals and personal injury claimants, generally seek compensatory and punitive damages. ~~Allergan has previously reached settlements with certain states, counties, and cities. Allergan is engaged in negotiations with representatives for the remaining~~Of these approximately 610 lawsuits, approximately 195 of them are brought by states, counties, cities, and other municipal ~~entities and~~entities. Three other lawsuits are brought by 3 Native American tribes regarding a potential settlement, with payments likely to be made over a number of years. While negotiations are on-going and definitive terms have not been reached, a framework for an agreement exists, including an estimate of a potential settlement amount based on maximum participation in the potential settlement.Tribes. AbbVie recorded a charge of $2.1 billion to selling, general and administrative expense in the consolidated statement of earnings in the second quarter of 2022 related to ~~this potential settlement.~~its settlement of over 2,500 lawsuits by states, counties, cities, other municipal entities, and Native American


2023 Form 10-Q \|			21

tribes. Approximately 160 of the remaining 198 such lawsuits are in the process of being dismissed with prejudice pursuant to that settlement.

In ~~July 2019, the New Mexico Attorney General~~March 2023, AbbVie Inc. filed a ~~lawsuit,~~petition in the United States Tax Court, ~~State~~AbbVie Inc. and Subsidiaries v. Commissioner of ~~New Mexico ex rel. Balderas v. AbbVie Inc., et al.~~Internal Revenue,. The petition disputes the Internal Revenue Service determination concerning a $572 million income tax benefit recorded in ~~New Mexico District Court~~2014 related to a payment made to a third party for ~~Santa Fe County against AbbVie and other companies alleging their marketing~~the termination of ~~AndroGel violated New Mexico’s Unfair Practices Act. In October 2020, the state added~~ a ~~claim under the New Mexico False Advertising Act. In August 2022, the parties finalized their settlement of this matter.~~proposed business combination.

Shareholder and Securities Litigation

In June 2016, a lawsuit, Elliott Associates, L.P., et al. v. AbbVie Inc., was filed by five investment funds against AbbVie in the Cook County, Illinois Circuit Court alleging that AbbVie made misrepresentations and omissions in connection with its proposed transaction with Shire. Similar lawsuits were filed between July 2017 and October 2019 against AbbVie and in some instances its chief executive officer in the same court by additional investment funds. The court granted motions dismissing the claims of three investment-fund plaintiffs, which they appealed. One appeal was dismissed with prejudice in August 2021. In the other two appeals, the Illinois Appellate Court affirmed the dismissal of one in March 2021 and affirmed the dismissal of the other in February 2022. One of these plaintiffs refiled its lawsuit in the New York Supreme Court for the County of New York, where it was dismissed in November 2020, and that dismissal was affirmed by the Supreme Court of New York, Appellate Division, in January 2022. In September 2021, the Illinois court granted AbbVie's motion for summary judgment against all remaining plaintiffs on all the remaining claims, dismissing them with prejudice. Those plaintiffs have appealed the dismissals.

In October 2018, a federal securities lawsuit, Holwill v. AbbVie Inc., et al.al., was filed in the United States District Court for the Northern District of Illinois against AbbVie, its chief executive officer and former chief financial officer, alleging that reasons stated for Humira sales growth in financial filings between 2013 and 2018 were misleading because they omitted alleged misconduct in connection with Humira patient and reimbursement support services and other services and items of value that allegedly induced Humira prescriptions. In September 2021, the court granted plaintiffs' motion to certify a class. ~~In May 2022, a shareholder derivative lawsuit, Ranney v. Gonzalez, et al., was~~

Lawsuits were filed ~~in Delaware Chancery Court, alleging that certain AbbVie directors and officers breached their fiduciary duties based on related allegations.~~

~~Lawsuits are pending~~ against Allergan and certain of its ~~current and~~ former officers alleging they made misrepresentations and omissions regarding Allergan's textured breast implants. The lawsuits, which were filed by Allergan shareholders, have been consolidated in the United States District Court for the Southern District of New York as In re: Allergan plc Securities ~~Litigation~~.Litigation. The plaintiffs generally seek compensatory damages and attorneys’ fees. In September 2019, the court partially granted Allergan's motion to dismiss. In September 2021, the court granted plaintiffs' motion to certify a class.

In ~~April~~December 2022, ~~a federal securities lawsuit, Nakata v. AbbVie Inc., was filed in~~ the ~~United States District Court~~court granted Allergan's motion for ~~the Northern District of Illinois against AbbVie and certain officers alleging misstatements regarding the potential effect that safety information about another company’s product would have~~summary judgment on the ~~Food~~remaining claims, dismissing them with prejudice. Plaintiffs are appealing the court's motion to dismiss and ~~Drug Administration’s approval and labeling for AbbVie’s Rinvoq.~~ summary judgment rulings.

In May and July 2022, two shareholder derivative lawsuits, Treppel Family Trust v. Gonzalez et al., and Katcher v. Gonzalez, et al., were filed in the ~~same court,~~United States District Court for the Northern District of Illinois, alleging that certain AbbVie directors and officers breached fiduciary and other legal duties ~~based~~in making or allowing alleged misstatements regarding the potential effect that safety information about another company’s product would have on ~~related allegations.~~the Food and Drug Administration’s approval and labeling for AbbVie’s Rinvoq.

Product Liability and General Litigation

In April 2023, a putative class action lawsuit, Camargo v. AbbVie Inc., was filed in the United States District Court for the Northern District of Illinois on behalf of Humira patients who paid for Humira based on its list price or who, after losing insurance coverage, discontinued Humira because they could not pay based on its list price, alleging that Humira’s list price is excessive in violation of multiple states’ unfair and deceptive trade practices statutes. The plaintiff generally seeks monetary damages, injunctive relief, and attorneys’ fees.

In 2018, a qui tam lawsuit, U.S. ex rel. Silbersher v. Allergan Inc., et al., was filed in the United States District Court for the Northern District of California against several Allergan entities and others, alleging that their conduct before the U.S. Patent Office resulted in false claims for payment being made to federal and state healthcare payors for Namenda XR and Namzaric. The plaintiff-relator ~~seeks~~sought damages and attorneys' fees under the federal False Claims Act and state law analogues. The federal government and state


~~2022 Form 10-Q~~ \|			21

governments declined to intervene in the lawsuit. In ~~August 2022,~~March 2023, the ~~United States Court of Appeals reversed the district court’s denial of~~court granted Allergan’s motion to dismiss, dismissing plaintiff-relator’s federal law claims with prejudice and state law claims without prejudice. The plaintiff-relator is appealing the ~~case.~~court’s motion to dismiss ruling.

Intellectual Property Litigation

Pharmacyclics LLC, a wholly owned subsidiary of AbbVie, is seeking to enforce its patent rights relating to ibrutinib tablets (a drug Pharmacyclics sells under the trademark Imbruvica). Cases were filed in the United States District Court for the District of Delaware in March 2019 against Alvogen Pine Brook LLC and Natco Pharma Ltd.. In August 2021, the court issued a decision holding all asserted patents infringed and valid. The judgment precludes Defendants from obtaining regulatory approval and launching until the last patent expires in 2036. On August 30, 2021, Defendants appealed. An appellate hearing occurred in October 2022. Janssen Biotech, Inc. which is in a global collaboration with Pharmacyclics concerning the development and marketing of Imbruvica, is the co-plaintiff in these suits.

AbbVie Inc. is seeking to enforce patent rights relating to venetoclax (a drug sold under the trademark Venclexta). Litigation was filed in the United States District Court for the District of Delaware in July 2020 against Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc.:; and Alembic Pharmaceuticals Ltd., Alembic Pharmaceuticals, Inc., and Alembic Global Holdings SA. AbbVie alleges defendants’ proposed generic venetoclax products infringe certain patents and seeks declaratory and injunctive relief. Genentech, Inc., which is in a global collaboration with AbbVie concerning the development and marketing of Venclexta, is the co-plaintiff in this suit.


~~2022~~2023 Form 10-Q \|			22

Note 13 Segment Information

AbbVie operates as a single global business segment dedicated to the research and development, manufacturing, commercialization and sale of innovative medicines and therapies. This operating structure enables the Chief Executive Officer, as chief operating decision maker (CODM), to allocate resources and assess business performance on a global basis in order to achieve established long-term strategic goals. Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, manufacturing and supply of products. Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region or therapeutic area. All of these activities are supported by a global corporate administrative staff. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the CODM for purposes of assessing performance, allocating resources and planning and forecasting future periods.

The following table details AbbVie’s worldwide net revenues:


			Three months ended September 30,					Nine months ended September 30,							Three months ended September 30,						Nine months ended September 30,

(in millions)	(in millions)						2022			2021			2022			2021	(in millions)			2023			2022			2023	2022
Immunology	Immunology												Immunology
Humira	Humira	United States	$	4,956	$	4,613		$	13,613		$	12,777	Humira	United States	$	3,020		$	4,956		$	9,420		$	13,613
		International	603		812			2,045			2,583			International	527			603			1,680			2,045
		Total	$	5,559	$	5,425		$	15,658		$	15,360		Total	$	3,547		$	5,559		$	11,100		$	15,658
Skyrizi	Skyrizi	United States	$	1,221	$	679		$	3,081		$	1,725	Skyrizi	United States	$	1,875		$	1,221		$	4,648		$	3,081
		International	176		117			508			319			International	251			176			721			508
		Total	$	1,397	$	796		$	3,589		$	2,044		Total	$	2,126		$	1,397		$	5,369		$	3,589
Rinvoq	Rinvoq	United States	$	505	$	348		$	1,228		$	889	Rinvoq	United States	$	801		$	505		$	1,895		$	1,228
		International	190		105			524			245			International	309			190			819			524
		Total	$	695	$	453		$	1,752		$	1,134		Total	$	1,110		$	695		$	2,714		$	1,752
Hematologic Oncology
Oncology													Oncology
Imbruvica	Imbruvica	United States	$	849	$	1,109		$	2,585		$	3,207	Imbruvica	United States	$	678		$	849		$	1,982		$	2,585
		Collaboration revenues	286		265			868			816			Collaboration revenues	230			286			711			868
		Total	$	1,135	$	1,374		$	3,453		$	4,023		Total	$	908		$	1,135		$	2,693		$	3,453
Venclexta	Venclexta	United States	$	259	$	237		$	740		$	685	Venclexta	United States	$	281		$	259		$	811		$	740
		International	256		255			753			647			International	309			256			888			753
		Total	$	515	$	492		$	1,493		$	1,332		Total	$	590		$	515		$	1,699		$	1,493
Epkinly													Epkinly	Collaboration revenues	$	14		$	—		$	14		$	—
Aesthetics	Aesthetics												Aesthetics
Botox Cosmetic	Botox Cosmetic	United States	$	370	$	356		$	1,232		$	1,027	Botox Cosmetic	United States	$	388		$	370		$	1,217		$	1,232
		International	267		189			741			579			International	232			267			747			741
		Total	$	637	$	545		$	1,973		$	1,606		Total	$	620		$	637		$	1,964		$	1,973
Juvederm Collection	Juvederm Collection	United States	$	125	$	159		$	420		$	478	Juvederm Collection	United States	$	116		$	125		$	363		$	420
		International	227		195			686			625			International	205			227			681			686
		Total	$	352	$	354		$	1,106		$	1,103		Total	$	321		$	352		$	1,044		$	1,106
Other Aesthetics	Other Aesthetics	United States	$	265	$	305		$	837		$	968	Other Aesthetics	United States	$	255		$	265		$	785		$	837
		International	47		47			130			149			International	43			47			130			130
		Total	$	312	$	352		$	967		$	1,117		Total	$	298		$	312		$	915		$	967
Neuroscience	Neuroscience												Neuroscience
Botox Therapeutic	Botox Therapeutic	United States	$	584	$	534		$	1,641		$	1,451	Botox Therapeutic	United States	$	626		$	584		$	1,827		$	1,641
		International	115		111			350			329			International	122			115			388			350
		Total	$	699	$	645		$	1,991		$	1,780		Total	$	748		$	699		$	2,215		$	1,991
Vraylar	Vraylar	United States	$	554	$	461		$	1,473		$	1,239	Vraylar	United States	$	750		$	554		$	1,967		$	1,473
														International	1			—			3			—
														Total	$	751		$	554		$	1,970		$	1,473
Duodopa	Duodopa	United States	$	22	$	23		$	72		$	73	Duodopa	United States	$	25		$	22		$	74		$	72
		International	88		104			279			310			International	93			88			279			279
		Total	$	110	$	127		$	351		$	383		Total	$	118		$	110		$	353		$	351
Ubrelvy	Ubrelvy	United States	$	160	$	162		$	483		$	369	Ubrelvy	United States	$	230		$	160		$	574		$	483
														International	3			—			7			—
														Total	$	233		$	160		$	581		$	483
Qulipta		United States	$	62	$	—		$	106		$	—
Other Neuroscience		United States	$	82	$	166		$	400		$	489
		International	5		5			14			13
		Total	$	87	$	171		$	414		$	502


~~2022~~2023 Form 10-Q \|			23


			Three months ended September 30,					Nine months ended September 30,							Three months ended September 30,						Nine months ended September 30,

(in millions)	(in millions)						2022			2021			2022			2021	(in millions)			2023			2022			2023	2022
Qulipta													Qulipta	United States	$	131		$	62		$	292		$	106
														International	1			—			2			—
														Total	$	132		$	62		$	294		$	106
Other Neuroscience													Other Neuroscience	United States	$	55		$	82		$	195		$	400
														International	6			5			15			14
														Total	$	61		$	87		$	210		$	414
Eye Care	Eye Care												Eye Care
Ozurdex													Ozurdex	United States	$	34		$	35		$	107		$	104
														International	86			71			247			219
														Total	$	120		$	106		$	354		$	323
Lumigan/Ganfort	Lumigan/Ganfort	United States	$	59	$	63		$	186		$	201	Lumigan/Ganfort	United States	$	28		$	59		$	142		$	186
		International	62		75			205			229			International	63			62			198			205
		Total	$	121	$	138		$	391		$	430		Total	$	91		$	121		$	340		$	391
Alphagan/Combigan	Alphagan/Combigan	United States	$	37	$	89		$	161		$	271	Alphagan/Combigan	United States	$	30		$	37		$	90		$	161
		International	36		39			111			117			International	40			36			116			111
		Total	$	73	$	128		$	272		$	388		Total	$	70		$	73		$	206		$	272
Restasis	Restasis	United States	$	132	$	305		$	518		$	884	Restasis	United States	$	104		$	132		$	265		$	518
		International	10		14			38			42			International	13			10			43			38
		Total	$	142	$	319		$	556		$	926		Total	$	117		$	142		$	308		$	556
Other Eye Care	Other Eye Care	United States	$	134	$	128		$	400		$	375	Other Eye Care	United States	$	114		$	99		$	334		$	296
		International	153		158			492			488			International	93			82			288			273
		Total	$	287	$	286		$	892		$	863		Total	$	207		$	181		$	622		$	569
Other Key Products	Other Key Products												Other Key Products
Mavyret	Mavyret	United States	$	190	$	183		$	562		$	557	Mavyret	United States	$	167		$	190		$	531		$	562
		International	193		243			599			726			International	203			193			590			599
		Total	$	383	$	426		$	1,161		$	1,283		Total	$	370		$	383		$	1,121		$	1,161
Creon	Creon	United States	$	336	$	310		$	941		$	864	Creon	United States	$	305		$	336		$	892		$	941
Linzess/Constella	Linzess/Constella	United States	$	262	$	253		$	742		$	728	Linzess/Constella	United States	$	279		$	262		$	799		$	742
		International	9		8			24			23			International	9			9			26			24
		Total	$	271	$	261		$	766		$	751		Total	$	288		$	271		$	825		$	766

All other	All other		$	925	$	1,117		$	3,145		$	3,814	All other		$	782		$	925		$	2,214		$	3,145
Total net revenues	Total net revenues		$	14,812	$	14,342		$	42,933		$	41,311	Total net revenues		$	13,927		$	14,812		$	40,017		$	42,933


~~2022~~2023 Form 10-Q \|			24

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the financial condition of AbbVie Inc. (AbbVie or the company) as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 and the results of operations for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022. This commentary should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying notes appearing in Item 1, “Financial Statements and Supplementary Data.”

EXECUTIVE OVERVIEW

Company Overview

AbbVie is a global, diversified research-based biopharmaceutical company positioned for success with a comprehensive product portfolio that has leadership positions across immunology, oncology, aesthetics, neuroscience and eye care. AbbVie uses its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases.

AbbVie's products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. Certain products (including aesthetic products and devices) are also sold directly to physicians and other licensed healthcare providers. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to ~~customers~~wholesalers or through distributors, and depending on the market ~~served.~~works through largely centralized national payers system to agree on reimbursement terms. Certain products are co-marketed or co-promoted with other companies. AbbVie ~~has approximately 50,000 employees. AbbVie~~ operates as a single global business ~~segment.~~segment and has approximately 50,000 employees.

~~2022~~2023 Strategic Objectives

AbbVie's mission is to discover and develop innovative medicines and products that solve serious health issues today and address the medical challenges of tomorrow while achieving top-tier financial performance through outstanding execution. AbbVie intends to ~~continue to~~execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) ~~growing revenues by~~ leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution of new product launches; (iii) continuing to invest in and expand its pipeline in support of opportunities in immunology, oncology, aesthetics, neuroscience and eye care as well as continued investment in key on-market products; (iv) ~~expanding~~generating substantial operating ~~margins;~~cash flows to support investment in innovative research and ~~(v) returning~~development, and return cash to shareholders via a strong and growing dividend while also reducing debt. In addition, AbbVie anticipates several regulatory submissions and data readouts from key clinical trials in the next 12 months.

Financial Results

The company's financial performance for the nine months ended September 30, ~~2022~~2023 included delivering worldwide net revenues of ~~$42.9~~$40.0 billion, operating earnings of ~~$12.6~~$9.6 billion, diluted earnings per share of ~~$5.24~~$2.26 and cash flows from operations of ~~$17.5~~$18.1 billion. Worldwide net revenues ~~grew by 4%~~decreased 7% on a reported basis and 6% on a constant currency ~~basis, reflecting growth across its immunology, neuroscience and aesthetics portfolios.~~basis.

Diluted earnings per share was ~~$5.24~~$2.26 for the nine months ended September 30, ~~2022~~2023 and included the following after-tax costs: (i) ~~$4.8~~$5.1 billion related to the amortization of intangible assets; (ii) ~~$2.0~~$3.3 billion ~~for charges related to litigation matters; (iii) $657 million~~ for the change in fair value of contingent consideration liabilities; ~~(iv) $604 million~~and (iii) $2.3 billion related to intangible asset ~~impairment; and (v) $567 million of acquisition and integration expenses. These costs were partially offset by an after-tax gain of $126 million related to the divestiture of Pylera.~~ impairment.Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.

Following the closing of the Allergan acquisition, AbbVie implemented an integration plan designed to reduce costs, integrate and optimize the combined organization. The integration plan is expected to realize approximately $2.5 billion of annual cost synergies in 2022.

To achieve these integration objectives, AbbVie expects to incur total cumulative charges of approximately $2 billion through 2022. These costs consist of severance and employee benefit costs (cash severance, non-cash severance, including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses.


~~2022 Form 10-Q~~ \|			25

~~Recent Global Events~~

~~Russia/Ukraine~~

In response to the military conflict between Russia and Ukraine, the United States and other North Atlantic Treaty Organization member states, as well as certain non-member states, announced targeted economic sanctions and export controls on Russia and Belarus. These include restrictions on the export and transfer of products containing certain toxins, including Botox, to Russia and Belarus. However, AbbVie is not prohibited to continue the sale of essential pharmaceutical products to help ensure patients receive an uninterrupted supply of their medicines. In March 2022, AbbVie announced the suspension of operations for all aesthetics products in Russia. In April 2022, AbbVie also announced that all profits from the sales of essential medicines in Russia will be donated to support direct humanitarian relief efforts in Ukraine. While the company’s operations in Russia, Belarus and Ukraine are not significant, if the conflict escalates and results in broader economic and political concerns, AbbVie’s business could be adversely impacted.

~~Impact of the Coronavirus Disease 2019 (COVID-19)~~

In response to the ongoing public health crisis posed by COVID-19, AbbVie continues to focus on ensuring the safety of employees. Throughout the pandemic, AbbVie has followed health and safety guidance from state and local health authorities and implemented safety measures for those employees who are returning to the workplace.

AbbVie also continues to closely manage manufacturing and supply chain resources around the world to help ensure that patients continue to receive an uninterrupted supply of their medicines. Clinical trial sites are being monitored locally to protect the safety of study participants, staff and employees. While the impact of COVID-19 on AbbVie's operations to date has not been material, AbbVie continues to experience lower new patient starts in certain products and markets. AbbVie expects this matter could continue to negatively impact its results of operations throughout the duration of the pandemic.

The extent to which COVID-19 may impact AbbVie's financial condition and results of operations remains uncertain and is dependent on numerous evolving factors, including the measures being taken by authorities to mitigate against the spread of COVID-19, the emergence of new variants and the effectiveness of vaccines and therapeutics.

Research and Development

Research and innovation are the cornerstones of AbbVie’s business as a global biopharmaceutical company. AbbVie’s long-term success depends to a great extent on its ability to continue to discover and develop innovative products and acquire or collaborate on compounds currently in development by other biotechnology or pharmaceutical companies.

AbbVie’s pipeline currently includes approximately 8090 compounds, devices or indications in development individually or under collaboration or license agreements and is focused on such important specialties as immunology, oncology, aesthetics, neuroscience and eye care. Of these programs, ~~more than 40~~over 50 are in mid- and late-stage development.


2023 Form 10-Q \|			25

The following sections summarize transitions of significant programs from mid-stage development to late-stage development as well as developments in significant late-stage and registration programs. AbbVie expects multiple mid-stage programs to transition into late-stage programs in the next 12 months.

Significant Programs and Developments

Immunology

~~Skyrizi~~Rinvoq

•In ~~January 2022, AbbVie announced that~~March 2023, the ~~U.S. Food and Drug Administration (FDA) approved Skyrizi for the treatment of adults with active psoriatic arthritis.~~

•~~In June 2022, AbbVie announced that the FDA approved Skyrizi for the treatment of adults with moderately to severely active Crohn’s disease.~~

•~~In September 2022, AbbVie announced that~~European Commission (EC) issued their final decision on the European Medicines Agency’s (EMA) review of the benefit-risk of medicines in the JAK inhibitor class for the treatment of inflammatory diseases, including Rinvoq. Confirming the Committee for Medicinal Products for Human Use ~~adopted a positive~~(CHMP) opinion, ~~recommending~~ the approval of Skyrizi for the treatment of adults with moderately to severely active Crohn's disease who have had inadequate response, lost response or were intolerant to conventional or biologic therapy.


~~2022 Form 10-Q~~ \|			26

~~Rinvoq~~

•~~In January 2022, AbbVie announced that the FDA~~previously approved Rinvoq indication statements were not changed and the dosage and special warnings for all JAK inhibitors were updated to include additional information about the treatment of moderate to severe atopic dermatitis in adults and children 12 years of age and older whose disease did not respond to previous treatment and is not well controlled with other pills or injections, including biologic medicines, or when use of other pills or injections is not recommended.

•~~In February 2022,~~ ~~AbbVie was notified that the European Commission (EC) is requesting the European Medicines Agency (EMA) to assess safety concerns~~risks associated with JAK inhibitor products authorized in inflammatory diseases and to evaluate the impact of these events on their benefit-risk balance. The assessment covers all JAK inhibitors approved for use in inflammatory diseases.

•In February 2022, AbbVie announced top-line results from its second Phase 3 induction study, U-Excel, for Rinvoq in patients with moderate to severe Crohn’s disease who had an inadequate response or were intolerant to conventional or biologic therapy met the primary and most key secondary endpoints.

•In March 2022, AbbVie announced that the FDA approved Rinvoq for the treatment of adults with moderately to severely active ulcerative colitis (UC) who have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers.inhibitors.

•In April ~~2022, AbbVie announced that the FDA approved Rinvoq for the treatment of adults with active ankylosing spondylitis who have had an inadequate response or intolerance to one or more TNF blockers.~~

•In May 2022, AbbVie announced positive top-line results from U-ENDURE, its Phase 3 maintenance study for Rinvoq in adult patients with moderate to severe Crohn's disease who had an inadequate response or were intolerant to a conventional or biologic therapy. The results showed that more patients treated with Rinvoq achieved the co-primary and secondary endpoints at one year compared to placebo.

•~~In July 2022,~~2023, AbbVie announced that the EC approved Rinvoq for the treatment of adults with moderately to severely active UCCrohn’s disease who have had an inadequate response, lost response or were intolerant to either conventional therapy or a biologic agent.

•In ~~July 2022,~~May 2023, AbbVie announced ~~its submission of a supplemental New~~that the U.S. Food and Drug ~~Application (sNDA) to the FDA and a marketing authorization application (MAA) to the EMA for~~Administration (FDA) approved Rinvoq for the treatment of adults with moderately to severely active Crohn’s disease who have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers.

•In July 2023, AbbVie initiated its Phase 3 Step-Up HS study to evaluate efficacy and safety of Rinvoq in adults and adolescents with moderate to severe hidradenitis suppurativa (HS) who have failed anti-TNF therapy and/or one approved non-anti-TNF inhibitor therapy for HS.

•In August 2023, AbbVie initiated its Phase 3 Select-SLE study to evaluate Rinvoq in moderate to severe systemic Lupus Erythematosus.

•In October 2023, AbbVie announced that its Phase 2b study evaluating Rinvoq in adults with non-segmental Vitiligo met the primary endpoint. Based on these data, AbbVie is advancing the program to Phase 3.

Skyrizi

•In March 2023, AbbVie announced positive top-line results from its Phase 3 induction study, INSPIRE, for Skyrizi in patients with moderately to severely active ulcerative colitis met the primary and all secondary endpoints.

•In June 2023, AbbVie announced positive top-line results from its Phase 3 maintenance study, COMMAND, for Skyrizi in patients with moderately to severely active ulcerative colitis met the primary and key secondary endpoints.

•In July 2023, AbbVie announced results from the head-to-head Phase 4 IMMpulse study that evaluated the efficacy and safety of Skyrizi compared to Otezla among adult patients with moderate plaque psoriasis (PsO) eligible for systemic therapy. In the study, significantly more patients achieved co-primary endpoints with Skyrizi versus Otezla. Skyrizi was well-tolerated with no new safety signals identified.

•In August 2023, AbbVie submitted regulatory applications to FDA and EMA for Skyrizi for the treatment of adults with moderately to severely active ulcerative colitis.

•In September 2023, AbbVie announced results from the head-to-head Phase 3 SEQUENCE study that evaluated the efficacy and safety of Skyrizi compared to Stelara among adult patients with moderately to severely active Crohn’s disease. In the study, Skyrizi met both primary endpoints at week 24 and achieved superiority of endoscopic remission at week 48 versus Stelara. In addition, all secondary endpoints achieved statistical significance for superiority versus Stelara. Skyrizi was well-tolerated with no new safety signals identified.

Oncology

Epkinly

•In ~~July 2022, AbbVie announced that the EC approved Rinvoq for the treatment of adult patients with active non-radiographic axial spondyloarthritis (nr-axSpA).~~

•In October 2022, AbbVie announced that the FDA approved Rinvoq for the treatment of adults with active nr-axSpA with objective signs of inflammation who have had an inadequate response or intolerance to TNF blocker therapy.

~~Oncology~~

~~Teliso-V~~

•In January 2022, AbbVie announced that the FDA granted Breakthrough Therapy Designation to investigational telisotuzumab vedotin (Teliso-V) for the treatment of patients with advanced/metastatic epidermal growth factor receptor wild type, nonsquamous non-small cell lung cancer with high levels of c-Met overexpression whose disease has progressed on or after platinum-based therapy.

•~~In May 2022,~~March 2023, AbbVie initiated a Phase 3 clinical trial to evaluate ~~Teliso-V versus docetaxel for the treatment of~~epcoritamab in combination with R-CHOP compared to R-CHOP in patients with ~~previously treated c-Met overexpressing, epidermal growth factor receptor wild type, advanced/metastatic non-squamous non-small cell lung cancer.~~

~~Imbruvica~~

•In August 2022, AbbVie announced that the FDA approved the use of Imbruvica for the treatment of pediatric patients one year and older with chronic graft versus host disease after failure of one or more lines of systemic therapy.

•In August 2022, the National Comprehensive Cancer Network (NCCN) in the United States issued updated guidelines for the management of chronic lymphocytic leukemia (CLL) re-categorizing Imbruvica from “Preferred Regimen” to “Other Recommended Regimen”newly diagnosed diffuse large B-cell lymphoma (DLBCL).


~~2022~~2023 Form 10-Q \|			2726

~~Epcoritamab~~

•In ~~March 2022, Genmab A/S (Genmab)~~May 2023, AbbVie announced that the FDA ~~granted orphan-drug designation~~approved Epkinly (epcoritamab) as the first and only bispecific antibody to the investigational medicine, epcoritamab (DuoBody-CD3xCD20), for the treatment of follicular lymphoma. Genmab and AbbVie are co-developing epcoritamab and will share commercial responsibilities in the U.S. and Japan,treat adult patients with ~~AbbVie responsible for further global commercialization.~~

•In June 2022, AbbVie and Genmab announced primary results from the large B-cell lymphoma expansion cohort in the EPCORE NHL-1 phase 2 clinical trial evaluating epcoritamab, an investigational subcutaneous bispecific antibody. In this study, epcoritamab demonstrated efficacy with durable responses in patients who had previously received at least two prior lines of anti-lymphoma therapy including chimeric antigen receptor T-cell therapy.relapsed or refractory (R/R) DLBCL.

•In September ~~2022,~~2023, AbbVie ~~and Genmab submitted a biological license application to~~announced that the ~~FDA~~EC approved Tepkinly (epcoritamab) for ~~epcoritamab for the treatment~~adults with R/R DLBCL after two or more lines of ~~patients with relapsed/refractory large B-cell lymphoma.~~systemic therapy.

Imbruvica

•In ~~October 2022,~~May 2023, AbbVie voluntarily withdrew, in the U.S., accelerated Imbruvica approvals for patients with mantle cell lymphoma (MCL) who have received at least one prior therapy and ~~Genmab submitted an MAA~~with marginal zone lymphoma (MZL) who require systemic therapy and have received at least one prior anti-CD20-based therapy. This voluntary action is due to requirements related to the ~~EMA~~accelerated approval status granted by the FDA for ~~epcoritamab~~MCL and MZL. Other approved indications for Imbruvica in the U.S. are not affected.

Navitoclax

•In July 2023, AbbVie announced top-line results from the Phase 3 TRANSFORM-1 clinical trial evaluating the safety and efficacy of navitoclax, a BCL-XL/BCL-2 inhibitor, in combination with ruxolitinib in adult patients with primary or secondary myelofibrosis (MF). The combination of navitoclax and ruxolitinib met the study’s primary endpoint, demonstrating statistically significant improvement in the number of patients who achieved Spleen Volume Reduction of at least 35 percent at week 24 compared to treatment with ruxolitinib and a placebo. The study did not meet the first ranked secondary endpoint of improvement in patients’ Total Symptom Score from baseline to week 24. The company plans to wait for additional follow up data on the primary, secondary and other endpoints, expected in the fourth quarter of this year, before engaging with regulatory agencies regarding potential next steps.

Venclexta

•In September 2023, AbbVie announced top-line results from the Phase 3 CANOVA study evaluating the safety and efficacy of Venclexta plus dexamethasone (VenDex) for patients with t(11;14)-positive relapsed or refractory (R/R) multiple myeloma who have received two or more prior treatments. The data did not demonstrate that the treatment combination significantly improved progression-free survival (PFS), the primary endpoint of ~~patients~~the trial. Patients receiving VenDex showed improvement in median PFS with ~~relapsed/refractory diffuse large B-cell lymphoma.~~the combination of study comparator pomalidomide and dexamethasone (PomDex); however, the results did not reach statistical significance. The company plans to discuss the data with health authorities in the near future to further understand the potential of Venclexta as a biomarker-driven therapy in multiple myeloma.

Aesthetics

Juvederm Collection

•In ~~February 2022,~~May 2023, AbbVie announced that the FDA approved Skinvive by Juvederm ~~Volbella XC for improvement~~to improve skin smoothness of ~~infraorbital hollows~~the cheeks in adults over the age of 21.

•~~In August 2022, AbbVie announced the that the FDA approved Juvederm Volux XC for the improvement of jawline definition in adults over the age of 21 with moderate to severe loss of jawline definition.~~

~~BoNTE~~Botox Cosmetic

•In ~~March 2022,~~September 2023, AbbVie ~~initiated~~announced positive top-line results from the second of three Phase 3 clinical ~~trials to evaluate the efficacy and safety of BoNTE (AGN-151586)~~studies evaluating Botox Cosmetic for the treatment of ~~glabellar lines.~~moderate to severe platysma prominence associated with platysma muscle activity. All primary and secondary endpoints were met in the second Phase 3 study and results were consistent with findings from the first Phase 3 study. A Phase 3 open-label extension study is ongoing, with results expected later this year. The company plans to include data from the full Phase 3 study program as part of an upcoming FDA regulatory submission expected near the end of the year.

~~Neuroscience~~

~~Vraylar~~BoNT/E

•In ~~February 2022,~~October 2023, AbbVie ~~submitted an sNDA to the FDA for Vraylar~~announced positive top-line results from two pivotal Phase 3 clinical studies evaluating trenibotulinumtoxinE (BoNT/E) for the ~~adjunctive~~ treatment of ~~major depressive disorder in patients who are receiving ongoing antidepressant therapy.~~

~~Qulipta~~

•~~In March 2022, AbbVie announced results from the~~moderate to severe glabellar lines. All primary and secondary endpoints were met for both Phase 3 ~~PROGRESS trial for Qulipta in the preventive treatment~~studies and results support BoNT/E as a novel botulinum neurotoxin serotype E characterized by a rapid onset of ~~chronic migraine in adults met the primary endpoint~~action as early as 8 hours after administration and ~~resulted in significant improvements in all secondary endpoints after adjustment for multiple comparisons.~~short duration of effect within 2-3 weeks.

•~~In June 2022, AbbVie submitted an sNDA to the FDA for Qulipta for the preventative treatment of chronic migraine in adults.~~


2023 Form 10-Q \|			27

•
~~In July 2022, AbbVie submitted an MAA to the EMA for Qulipta for the prophylactic treatment of migraine in adult patients who have at least four migraine days per month.~~

Neuroscience

ABBV-951

•In ~~May 2022,~~March 2023, AbbVie ~~submitted~~announced that the FDA issued a Complete Response Letter (CRL) for the New Drug Application ~~to the FDA~~(NDA) for ABBV-951 (foscarbidopa/foslevodopa) for the treatment of motor fluctuations in ~~patients~~adults with advanced ~~Parkinson's~~Parkinson’s disease. In its letter, the FDA requested additional information about the device (pump) as part of the NDA review. The CRL did not request that AbbVie conduct additional efficacy and safety trials related to the drug.

Qulipta

•In April 2023, AbbVie announced that the FDA approved Qulipta for the preventive treatment of chronic migraine in adults.

•In August 2023, AbbVie announced that the EC approved Aquipta (Qulipta) for the preventive treatment of migraine in adults who have four or more migraine days per month.

For a more comprehensive discussion of AbbVie’s products and pipeline, see the company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.


~~2022~~2023 Form 10-Q \|			28

RESULTS OF OPERATIONS

Net Revenues

The comparisons presented at constant currency rates reflect comparative local currency net revenues at the prior year’s foreign exchange rates. This measure provides information on the change in net revenues assuming that foreign currency exchange rates had not changed between the prior and current periods. AbbVie believes that the non-GAAP measure of change in net revenues at constant currency rates, when used in conjunction with the GAAP measure of change in net revenues at actual currency rates, may provide a more complete understanding of the company’s operations and can facilitate analysis of the company’s results of operations, particularly in evaluating performance from one period to another.


		Three months ended September 30,						Percent change					Nine months ended September 30,						Percent change							Three months ended September 30,						Percent change					Nine months ended September 30,						Percent change
							At actual currency rates			At constant currency rates								At actual currency rates			At constant currency rates										At actual currency rates			At constant currency rates								At actual currency rates			At constant currency rates
(dollars in millions)	(dollars in millions)			2022							2021				2022							2021			(dollars in millions)			2023							2022				2023							2022
United States	United States	$	11,763		$	11,279		4.3	%		4.3	%	$	33,521		$	31,833		5.3	%		5.3	%	United States		$	10,852		$	11,763		(7.7)	%		(7.7)	%	$	30,773		$	33,521		(8.2)	%		(8.2)	%
International	International	3,049			3,063			(0.4)	%		9.6	%	9,412			9,478			(0.7)	%		6.7	%	International		3,075			3,049			0.8	%		1.4	%	9,244			9,412			(1.8)	%		1.6	%
Net revenues	Net revenues	$	14,812		$	14,342		3.3	%		5.4	%	$	42,933		$	41,311		3.9	%		5.6	%	Net revenues		$	13,927		$	14,812		(6.0)	%		(5.8)	%	$	40,017		$	42,933		(6.8)	%		(6.0)	%


~~2022~~2023 Form 10-Q \|			29

The following table details AbbVie’s worldwide net revenues:


			Three months ended September 30,						Percent change					Nine months ended September 30,						Percent change								Three months ended September 30,						Percent change					Nine months ended September 30,						Percent change
								At actual currency rates			At constant currency rates								At actual currency rates			At constant currency rates											At actual currency rates			At constant currency rates								At actual currency rates			At constant currency rates
(dollars in millions)	(dollars in millions)				2022							2021				2022							2021				(dollars in millions)			2023							2022				2023							2022
Immunology	Immunology																								Immunology
Humira	Humira	United States	$	4,956		$	4,613		7.4	%		7.4	%	$	13,613		$	12,777		6.5	%		6.5	%	Humira	United States		$	3,020		$	4,956		(39.1)	%		(39.1)	%	$	9,420		$	13,613		(30.8)	%		(30.8)	%
		International	603			812			(25.9)	%		(16.8)	%	2,045			2,583			(20.9)	%		(14.3)	%		International		527			603			(12.6)	%		(12.2)	%	1,680			2,045			(17.9)	%		(14.8)	%
		Total	$	5,559		$	5,425		2.5	%		3.9	%	$	15,658		$	15,360		1.9	%		3.0	%		Total		$	3,547		$	5,559		(36.2)	%		(36.2)	%	$	11,100		$	15,658		(29.1)	%		(28.7)	%
Skyrizi	Skyrizi	United States	$	1,221		$	679		79.8	%		79.8	%	$	3,081		$	1,725		78.6	%		78.6	%	Skyrizi	United States		$	1,875		$	1,221		53.5	%		53.5	%	$	4,648		$	3,081		50.9	%		50.9	%
		International	176			117			50.1	%		70.0	%	508			319			59.3	%		75.1	%		International		251			176			42.5	%		40.7	%	721			508			41.8	%		45.5	%
		Total	$	1,397		$	796		75.4	%		78.3	%	$	3,589		$	2,044		75.6	%		78.1	%		Total		$	2,126		$	1,397		52.1	%		51.9	%	$	5,369		$	3,589		49.6	%		50.1	%
Rinvoq	Rinvoq	United States	$	505		$	348		44.7	%		44.7	%	$	1,228		$	889		38.0	%		38.0	%	Rinvoq	United States		$	801		$	505		59.0	%		59.0	%	$	1,895		$	1,228		54.4	%		54.4	%
		International	190			105			82.9	%		>100.0 %		524			245			>100.0 %			>100.0 %			International		309			190			61.8	%		61.2	%	819			524			56.1	%		61.0	%
		Total	$	695		$	453		53.5	%		59.3	%	$	1,752		$	1,134		54.5	%		59.3	%		Total		$	1,110		$	695		59.8	%		59.6	%	$	2,714		$	1,752		54.9	%		56.4	%
Hematologic Oncology
Oncology																									Oncology
Imbruvica	Imbruvica	United States	$	849		$	1,109		(23.5)	%		(23.5)	%	$	2,585		$	3,207		(19.4)	%		(19.4)	%	Imbruvica	United States		$	678		$	849		(20.2)	%		(20.2)	%	$	1,982		$	2,585		(23.4)	%		(23.4)	%
		Collaboration revenues	286			265			7.6	%		7.6	%	868			816			6.3	%		6.3	%		Collaboration revenues		230			286			(19.6)	%		(19.6)	%	711			868			(18.0)	%		(18.0)	%
		Total	$	1,135		$	1,374		(17.4)	%		(17.4)	%	$	3,453		$	4,023		(14.2)	%		(14.2)	%		Total		$	908		$	1,135		(20.0)	%		(20.0)	%	$	2,693		$	3,453		(22.0)	%		(22.0)	%
Venclexta	Venclexta	United States	$	259		$	237		9.2	%		9.2	%	$	740		$	685		8.1	%		8.1	%	Venclexta	United States		$	281		$	259		8.1	%		8.1	%	$	811		$	740		9.4	%		9.4	%
		International	256			255			0.1	%		13.2	%	753			647			16.2	%		27.3	%		International		309			256			21.1	%		19.9	%	888			753			18.1	%		21.4	%
		Total	$	515		$	492		4.5	%		11.3	%	$	1,493		$	1,332		12.1	%		17.5	%		Total		$	590		$	515		14.6	%		14.0	%	$	1,699		$	1,493		13.8	%		15.5	%
Epkinly																									Epkinly	Collaboration revenues		$	14		$	—		n/m			n/m		$	14		$	—		n/m			n/m
Aesthetics	Aesthetics																								Aesthetics
Botox Cosmetic	Botox Cosmetic	United States	$	370		$	356		4.1	%		4.1	%	$	1,232		$	1,027		20.0	%		20.0	%	Botox Cosmetic	United States		$	388		$	370		5.0	%		5.0	%	$	1,217		$	1,232		(1.1)	%		(1.1)	%
		International	267			189			41.0	%		54.5	%	741			579			27.9	%		36.8	%		International		232			267			(13.3)	%		(10.9)	%	747			741			0.7	%		6.0	%
		Total	$	637		$	545		16.9	%		21.6	%	$	1,973		$	1,606		22.8	%		26.0	%		Total		$	620		$	637		(2.7)	%		(1.7)	%	$	1,964		$	1,973		(0.4)	%		1.6	%
Juvederm Collection	Juvederm Collection	United States	$	125		$	159		(21.9)	%		(21.9)	%	$	420		$	478		(12.3)	%		(12.3)	%	Juvederm Collection	United States		$	116		$	125		(6.4)	%		(6.4)	%	$	363		$	420		(13.3)	%		(13.3)	%
		International	227			195			16.9	%		27.7	%	686			625			9.9	%		17.6	%		International		205			227			(9.8)	%		(8.7)	%	681			686			(0.8)	%		4.5	%
		Total	$	352		$	354		(0.6)	%		5.3	%	$	1,106		$	1,103		0.3	%		4.6	%		Total		$	321		$	352		(8.6)	%		(7.9)	%	$	1,044		$	1,106		(5.6)	%		(2.3)	%
Other Aesthetics	Other Aesthetics	United States	$	265		$	305		(13.1)	%		(13.1)	%	$	837		$	968		(13.4)	%		(13.4)	%	Other Aesthetics	United States		$	255		$	265		(4.0)	%		(4.0)	%	$	785		$	837		(6.3)	%		(6.3)	%
		International	47			47			(0.8)	%		8.3	%	130			149			(12.8)	%		(7.2)	%		International		43			47			(8.1)	%		(7.0)	%	130			130			0.5	%		5.4	%
		Total	$	312		$	352		(11.4)	%		(10.2)	%	$	967		$	1,117		(13.4)	%		(12.7)	%		Total		$	298		$	312		(4.6)	%		(4.4)	%	$	915		$	967		(5.4)	%		(4.7)	%
Neuroscience	Neuroscience																								Neuroscience
Botox Therapeutic	Botox Therapeutic	United States	$	584		$	534		9.2	%		9.2	%	$	1,641		$	1,451		13.1	%		13.1	%	Botox Therapeutic	United States		$	626		$	584		7.2	%		7.2	%	$	1,827		$	1,641		11.3	%		11.3	%
		International	115			111			3.6	%		14.2	%	350			329			6.5	%		15.0	%		International		122			115			6.5	%		8.6	%	388			350			10.9	%		16.6	%
		Total	$	699		$	645		8.2	%		10.0	%	$	1,991		$	1,780		11.9	%		13.5	%		Total		$	748		$	699		7.1	%		7.4	%	$	2,215		$	1,991		11.3	%		12.3	%
Vraylar	Vraylar	United States	$	554		$	461		20.1	%		20.1	%	$	1,473		$	1,239		18.9	%		18.9	%	Vraylar	United States		$	750		$	554		35.2	%		35.2	%	$	1,967		$	1,473		33.6	%		33.6	%
																										International		1			—			>100.0 %			>100.0 %		3			—			>100.0 %			>100.0 %
																										Total		$	751		$	554		35.4	%		35.4	%	$	1,970		$	1,473		33.7	%		33.7	%
Duodopa	Duodopa	United States	$	22		$	23		(4.9)	%		(4.9)	%	$	72		$	73		(2.4)	%		(2.4)	%	Duodopa	United States		$	25		$	22		10.6	%		10.6	%	$	74		$	72		2.8	%		2.8	%
		International	88			104			(15.0)	%		(2.6)	%	279			310			(9.8)	%		—	%		International		93			88			6.6	%		2.3	%	279			279			—	%		1.1	%
		Total	$	110		$	127		(13.1)	%		(3.0)	%	$	351		$	383		(8.4)	%		(0.5)	%		Total		$	118		$	110		7.4	%		4.0	%	$	353		$	351		0.6	%		1.5	%
Ubrelvy	Ubrelvy	United States	$	160		$	162		(1.4)	%		(1.4)	%	$	483		$	369		31.0	%		31.0	%	Ubrelvy	United States		$	230		$	160		43.7	%		43.7	%	$	574		$	483		18.8	%		18.8	%
																										International		3			—			>100.0 %			>100.0 %		7			—			>100.0 %			>100.0 %
																										Total		$	233		$	160		45.6	%		45.6	%	$	581		$	483		20.3	%		20.3	%
Qulipta	Qulipta	United States	$	62		$	—		n/m			n/m		$	106		$	—		n/m			n/m		Qulipta	United States		$	131		$	62		>100.0 %			>100.0 %		$	292		$	106		>100.0 %			>100.0 %
Other Neuroscience		United States	$	82		$	166		(50.5)	%		(50.5)	%	$	400		$	489		(18.3)	%		(18.3)	%
		International	5			5			10.2	%		14.1	%	14			13			10.3	%		13.1	%		International		1			—			n/m			n/m		2			—			n/m			n/m
		Total	$	87		$	171		(49.0)	%		(48.9)	%	$	414		$	502		(17.6)	%		(17.5)	%		Total		$	132		$	62		>100.0 %			>100.0 %		$	294		$	106		>100.0 %			>100.0 %


~~2022~~2023 Form 10-Q \|			30


			Three months ended September 30,						Percent change					Nine months ended September 30,						Percent change								Three months ended September 30,						Percent change					Nine months ended September 30,						Percent change
								At actual currency rates			At constant currency rates								At actual currency rates			At constant currency rates											At actual currency rates			At constant currency rates								At actual currency rates			At constant currency rates
(dollars in millions)	(dollars in millions)				2022							2021				2022							2021				(dollars in millions)			2023							2022				2023							2022
Other Neuroscience																									Other Neuroscience	United States		$	55		$	82		(31.9)	%		(31.9)	%	$	195		$	400		(51.3)	%		(51.3)	%
																										International		6			5			6.2	%		9.6	%	15			14			6.4	%		11.8	%
																										Total		$	61		$	87		(29.9)	%		(29.7)	%	$	210		$	414		(49.3)	%		(49.1)	%
Eye Care	Eye Care																								Eye Care
Ozurdex																									Ozurdex	United States		$	34		$	35		(4.5)	%		(4.5)	%	$	107		$	104		2.6	%		2.6	%
																										International		86			71			22.3	%		21.7	%	247			219			13.1	%		16.1	%
																										Total		$	120		$	106		13.2	%		12.8	%	$	354		$	323		9.7	%		11.7	%
Lumigan/Ganfort	Lumigan/Ganfort	United States	$	59		$	63		(4.4)	%		(4.4)	%	$	186		$	201		(7.1)	%		(7.1)	%	Lumigan/Ganfort	United States		$	28		$	59		(53.0)	%		(53.0)	%	$	142		$	186		(23.6)	%		(23.6)	%
		International	62			75			(18.7)	%		(8.7)	%	205			229			(10.8)	%		(2.9)	%		International		63			62			2.7	%		1.4	%	198			205			(3.1)	%		(0.9)	%
		Total	$	121		$	138		(12.2)	%		(6.7)	%	$	391		$	430		(9.0)	%		(4.8)	%		Total		$	91		$	121		(24.8)	%		(25.5)	%	$	340		$	391		(12.9)	%		(11.8)	%
Alphagan/Combigan	Alphagan/Combigan	United States	$	37		$	89		(58.2)	%		(58.2)	%	$	161		$	271		(40.8)	%		(40.8)	%	Alphagan/Combigan	United States		$	30		$	37		(16.0)	%		(16.0)	%	$	90		$	161		(43.5)	%		(43.5)	%
		International	36			39			(8.9)	%		2.9	%	111			117			(5.1)	%		4.9	%		International		40			36			10.1	%		17.3	%	116			111			4.2	%		10.6	%
		Total	$	73		$	128		(43.0)	%		(39.4)	%	$	272		$	388		(30.0)	%		(27.0)	%		Total		$	70		$	73		(3.1)	%		0.4	%	$	206		$	272		(24.0)	%		(21.4)	%
Restasis	Restasis	United States	$	132		$	305		(56.7)	%		(56.7)	%	$	518		$	884		(41.3)	%		(41.3)	%	Restasis	United States		$	104		$	132		(20.7)	%		(20.7)	%	$	265		$	518		(48.8)	%		(48.8)	%
		International	10			14			(30.7)	%		(37.7)	%	38			42			(10.1)	%		(2.8)	%		International		13			10			35.0	%		42.1	%	43			38			14.2	%		20.1	%
		Total	$	142		$	319		(55.6)	%		(55.9)	%	$	556		$	926		(39.9)	%		(39.6)	%		Total		$	117		$	142		(17.0)	%		(16.5)	%	$	308		$	556		(44.5)	%		(44.1)	%
Other Eye Care	Other Eye Care	United States	$	134		$	128		3.7	%		3.7	%	$	400		$	375		6.3	%		6.3	%	Other Eye Care	United States		$	114		$	99		16.3	%		16.3	%	$	334		$	296		13.0	%		13.0	%
		International	153			158			(2.7)	%		9.1	%	492			488			0.9	%		10.1	%		International		93			82			11.9	%		12.0	%	288			273			5.1	%		8.6	%
		Total	$	287		$	286		0.1	%		6.6	%	$	892		$	863		3.3	%		8.5	%		Total		$	207		$	181		14.2	%		14.2	%	$	622		$	569		9.2	%		10.9	%
Other Key Products	Other Key Products																								Other Key Products
Mavyret	Mavyret	United States	$	190		$	183		3.5	%		3.5	%	$	562		$	557		0.9	%		0.9	%	Mavyret	United States		$	167		$	190		(12.3)	%		(12.3)	%	$	531		$	562		(5.6)	%		(5.6)	%
		International	193			243			(20.6)	%		(10.3)	%	599			726			(17.5)	%		(9.1)	%		International		203			193			5.2	%		5.8	%	590			599			(1.5)	%		1.8	%
		Total	$	383		$	426		(10.2)	%		(4.4)	%	$	1,161		$	1,283		(9.5)	%		(4.7)	%		Total		$	370		$	383		(3.5)	%		(3.2)	%	$	1,121		$	1,161		(3.5)	%		(1.8)	%
Creon	Creon	United States	$	336		$	310		8.5	%		8.5	%	$	941		$	864		9.0	%		9.0	%	Creon	United States		$	305		$	336		(9.1)	%		(9.1)	%	$	892		$	941		(5.2)	%		(5.2)	%
Linzess/Constella	Linzess/Constella	United States	$	262		$	253		3.4	%		3.4	%	$	742		$	728		2.0	%		2.0	%	Linzess/Constella	United States		$	279		$	262		6.8	%		6.8	%	$	799		$	742		7.7	%		7.7	%
		International	9			8			16.0	%		25.8	%	24			23			3.2	%		9.6	%		International		9			9			(11.1)	%		(13.0)	%	26			24			7.0	%		9.3	%
		Total	$	271		$	261		3.8	%		4.1	%	$	766		$	751		2.0	%		2.2	%		Total		$	288		$	271		6.2	%		6.1	%	$	825		$	766		7.7	%		7.8	%

All other	All other		$	925		$	1,117		(16.8)	%		(15.3)	%	$	3,145		$	3,814		(17.5)	%		(16.3)	%	All other			$	782		$	925		(15.5)	%		(14.1)	%	$	2,214		$	3,145		(29.6)	%		(28.5)	%
Total net revenues	Total net revenues		$	14,812		$	14,342		3.3	%		5.4	%	$	42,933		$	41,311		3.9	%		5.6	%	Total net revenues			$	13,927		$	14,812		(6.0)	%		(5.8)	%	$	40,017		$	42,933		(6.8)	%		(6.0)	%

n/m – Not meaningful

The following discussion and analysis of AbbVie’s net revenues by product is presented on a constant currency basis.

Global Humira sales ~~increased by 4%~~decreased 36% for the three months and 3%29% for the nine months ended September 30, ~~2022 primarily driven by market growth across therapeutic categories, partially offset by direct biosimilar competition in international markets.~~2023. In the United States, Humira sales increased by 7% for the three and nine months ended September 30, 2022 primarily driven by market growth across all indications and favorable pricing. This increase was partially offset by lower market share following corresponding market share gains of Skyrizi and Rinvoq. Internationally, Humira revenues decreased ~~by 17%~~39% for the three months and ~~14%~~31% for the nine months ended September 30, ~~2022~~2023 primarily driven by direct biosimilar competition ~~in international markets.~~following the loss of exclusivity on January 31, 2023. Internationally, Humira revenues decreased 12% for the three months and 15% for the nine months ended September 30, 2023 primarily driven by the continued impact of direct biosimilar competition. AbbVie continues to pursue strategies to maintain broad formulary access of Humira and manage the impact of biosimilar erosion.

Net revenues for Skyrizi increased ~~by 78%~~52% for the three months and 50% for the nine months ended September 30, ~~2022~~2023 primarily driven by continued strong volume and market share uptake ~~since launch as a treatment for plaque psoriasis~~ as well as market ~~growth. Net revenues for the three and nine months ended September 30, 2022 were also favorably impacted~~growth across all indications, partially offset by ~~recent regulatory approvals and expansion of Skyrizi for the treatment of psoriatic arthritis and Crohn’s disease.~~unfavorable pricing.

Net revenues for Rinvoq increased ~~by 59%~~60% for the three months and 56% for the nine months ended September 30, ~~2022~~2023 primarily driven by continued strong volume and market share uptake ~~since launch for the treatment of moderate to severe rheumatoid arthritis~~ as well as market ~~growth. Net revenues for the three and nine months ended September 30, 2022 were also favorably impacted~~growth across all indications, partially offset by ~~recent regulatory approvals and expansion of Rinvoq for the treatment of psoriatic arthritis, atopic dermatitis, ankylosing spondylitis and ulcerative colitis.~~unfavorable pricing.

Net revenues for Imbruvica represent product revenues in the United States and collaboration revenues outside of the United States related to AbbVie’s 50% share of Imbruvica profit. AbbVie's global Imbruvica revenues decreased ~~by 17%~~20% for the three months and ~~14%~~22% for the nine months ended September 30, ~~2022 as a result of~~2023 primarily driven by decreased ~~market~~ demand and lower market share in the United ~~States. The decrease in net revenues for the three and nine months ended September 30, 2022 was also partially offset by increased~~States as well as decreased collaboration revenues.

Net revenues for Venclexta increased by 11% for the three months and 18% for the nine months ended September 30, 2022 primarily due to continued expansion of Venclexta for the treatment of patients with CLL and acute myeloid leukemia.


~~2022~~2023 Form 10-Q \|			31

Net revenues for ~~Botox Cosmetic~~Venclexta increased ~~by 22%~~14% for the three months and ~~26%~~15% for the nine months ended September 30, ~~2022 due to~~2023. In the United States, net revenues increased 8% for the three months and 9% for the nine months ended September 30, 2023 primarily driven by market growth across all indications and favorable pricing. Internationally, net revenues increased 20% for the three months and 21% for the nine months ended September 30, 2023 primarily driven by market growth across all indications as well as continued market share uptake.

Net revenues for Botox Cosmetic decreased 2% for the three months and increased 2% for the nine months ended September 30, 2023. In the United States, Botox Cosmetic net revenues increased 5% for the three months ended September 30, 2023 primarily driven by increased consumer demand due to a recovery in the toxin market. Internationally, Botox Cosmetic net revenues decreased 11% for the three months ended September 30, 2023 primarily driven by ~~investment in key international markets~~decreased consumer demand due to economic weakening and ~~moderated market growth~~the timing of shipments in the ~~United States reflecting~~prior year. International net revenues increased 6% for the nine months ended September 30, 2023 primarily driven by recovery from COVID-19 in China, partially offset by economic ~~pressures impacting consumer discretionary spending.~~weakening during the third quarter and the timing of shipments in the prior year.

Net revenues for Juvederm Collection ~~increased by 5%~~decreased 8% for the three months ended September 30, 2023 and 2% for the nine months ended September 30, ~~2022.~~2023. In the United States, Juvederm Collection net revenues decreased 6% for the three months and 13% for the nine months ended September 30, 2023 primarily driven by ~~22%~~decreased consumer demand due to economic pressures, partially offset by new product launches. Internationally, Juvederm Collection net revenues decreased 9% for the three months ended September 30, 2023 primarily driven by decreased consumer demand due to economic weakening and the timing of shipments in the prior year. International net revenues increased 5% for the nine months ended September 30, 2023 primarily driven by recovery from COVID-19 in China, partially offset by economic weakening in the third quarter and the timing of shipments in the prior year.

Net revenues for Botox Therapeutic increased 7% for the three months and 12% for the nine months ended September 30, ~~2022 due to~~2023 primarily driven by market growth as well as market share uptake.

Net revenues for Vraylar increased ~~economic pressures impacting consumer discretionary spending and increased pricing promotions. International net revenues increased by 28%~~35% for the three months and ~~18%~~34% for the nine months ended September 30, ~~2022 due to increased consumer demand~~2023 primarily driven by ~~investment in key markets~~continued volume and ~~recovery from the COVID-19 pandemic, partially offset by the suspension of aesthetic operations in Russia.~~

market share uptake as well as market growth. Net revenues ~~for Botox Therapeutic increased by 10% for the three months and 13%~~ for the nine months ended September 30, ~~2022 due~~2023 were also favorably impacted by the regulatory approval of Vraylar as an adjunctive therapy to ~~market growth.~~antidepressants for the treatment of major depressive disorder in adults.

Net revenues for ~~Vraylar~~Ubrelvy increased ~~by 20%~~46% for the three months and ~~19%~~20% for the nine months ended September 30, ~~2022 due to higher~~2023 primarily driven by continued volume and market share ~~and~~uptake as well as market growth.

Net revenues for ~~Ubrelvy decreased~~Qulipta increased greater than 100% for the three and nine months ended September 30, 2023 primarily driven by 1%continued strong volume and market share uptake as well as market growth. Net revenues for the three months ended September 30, ~~2022 due to~~2023 were also favorably impacted by the ~~timing~~recent regulatory approval of ~~patient access program allowances, partially offset by market share uptake since launch and market growth. Net revenues increased by 31%~~Qulipta for the ~~nine months ended September 30, 2022 primarily due to increased market share uptake since launch, partially offset by the timing~~ preventative treatment of ~~patient access program allowances.~~

Net revenues for Mavyret decreased by 4% for the three months and 5% for the nine months ended September 30, 2022 due to the continued disruption of global hepatitis C virus markets due to the COVID-19 pandemic.chronic migraine in adults.

Gross Margin


		Three months ended September 30,								Nine months ended September 30,									Three months ended September 30,								Nine months ended September 30,
(dollars in millions)	(dollars in millions)	2022			2021			% change		2022			2021			% change		(dollars in millions)	2023			2022			% change		2023			2022			% change
Gross margin	Gross margin	$	9,790		$	9,952		(2)	%	$	29,689		$	28,185		5	%	Gross margin	$	7,442		$	9,790		(24)	%	$	25,306		$	29,689		(15)	%
as a % of net revenues	as a % of net revenues	66		%	69		%			69		%	68		%			as a % of net revenues	53		%	66		%			63		%	69		%

Gross margin as a percentage of net revenues decreased for the three ~~months~~ and ~~increased for the~~ nine months ended September 30, ~~2022~~2023 compared to the prior year. Gross margin percentage for the three and nine months ended September 30, ~~2022~~2023 was unfavorably impacted by an intangible asset impairment charge of ~~$770 million and~~$2.1 billion related to Imbruvica, higher amortization of ~~intangible assets,~~intangibles and changes in product mix, partially offset by the favorable impact of tax law changes in ~~product mix. Gross margin~~Puerto Rico.

Selling, General and Administrative


	Three months ended September 30,								Nine months ended September 30,
(dollars in millions)	2023			2022			% change		2023			2022			% change
Selling, general and administrative	$	3,372		$	3,304		2	%	$	9,679		$	11,843		(18)	%
as a % of net revenues	24		%	22		%			24		%	28		%

SG&A expenses as a percentage of net revenues increased for the three months and decreased for the nine months ended September 30, 2023 compared to the prior year. SG&A expense percentage for the three months ended September 30, 2023 was


2023 Form 10-Q \|			32

unfavorably impacted by increased brand investments and lower net revenues primarily driven by the Humira loss of exclusivity in the United States. SG&A expense percentage for the nine months ended September 30, ~~2022~~2023 was favorably impacted by ~~changes in product mix and~~ lower ~~amortization of intangible assets,~~litigation reserve charges, partially offset by ~~an intangible asset impairment charge~~lower net revenues primarily driven by the Humira loss of ~~$770 million.~~exclusivity in the United States. Litigation reserve charges were $2.5 billion for the nine months ended September 30, 2022.

~~Selling, General~~Research and ~~Administrative~~Development


		Three months ended September 30,								Nine months ended September 30,									Three months ended September 30,								Nine months ended September 30,
(dollars in millions)	(dollars in millions)	2022			2021			% change		2022			2021			% change		(dollars in millions)	2023			2022			% change		2023			2022			% change
Selling, general and administrative		$	3,304		$	3,083		7	%	$	11,843		$	9,089		30	%
Research and development																		Research and development	$	1,723		$	1,614		7	%	$	5,748		$	4,720		22	%
as a % of net revenues	as a % of net revenues	22		%	21		%			28		%	22		%			as a % of net revenues	12		%	11		%			14		%	11		%

~~Selling, general~~Research and ~~administrative (SG&A)~~development (R&D) expenses as a percentage of net revenues increased for the three and nine months ended September 30, 2022 compared to the prior year. SG&A expense percentage for the three months ended September 30, 2022 was unfavorably impacted by increased product launch expenses partially offset by leverage from revenue growth and increased synergies realized. SG&A expense percentage was unfavorably impacted by litigation reserve charges of $2.5 billion for the nine months ended September 30, 2022.


~~2022 Form 10-Q~~ \|			32

~~Research and Development and Acquired IPR&D and Milestones~~
Three months ended
September 30, Nine months ended
September 30,
(dollars in millions) 2022 2021 % change 2022 2021 % change
Research and development $ 1,614 $ 1,661 (3) % $ 4,720 $ 5,095 (7) %
as a % of net revenues 11 % 12 % 11 % 12 %
Acquired IPR&D and milestones $ 40 $ 402 (90) % $ 454 $ 719 (37) %

~~Research and development (R&D) expenses as a percentage of net revenues decreased for the three and nine months ended September 30, 2022~~2023 compared to the prior year. R&D expense percentage for the three and nine months ended September 30, ~~2022~~2023 was ~~favorably~~unfavorably impacted by increased ~~scale~~funding to support all stages of the ~~combined company~~company’s pipeline assets and ~~synergies realized as well as~~ lower ~~integration costs related to~~net revenues primarily driven by the ~~acquisition~~Humira loss of ~~Allergan.~~exclusivity in the United States. R&D expense percentage for the nine months ended September 30, ~~2022~~2023 was also ~~favorably~~unfavorably impacted by ~~the purchase~~an intangible asset impairment charge of ~~priority review vouchers from third parties in the prior year.~~$630 million.

Acquired IPR&D and Milestones


	Three months ended September 30,				Nine months ended September 30,
(dollars in millions)	2023		2022		2023		2022
Upfront charges	$	44	$	40	$	396	$	392
Development milestones	22		—		100		62
Acquired IPR&D and milestones	$	66	$	40	$	496	$	454

Acquired IPR&D and milestones expense represents upfront and subsequent development milestone payments incurred prior to regulatory approval to acquire rights to in-process R&D projects through R&D collaborations, licensing arrangements or other asset acquisitions. Acquired IPR&D and milestones expense infor the nine months ended September 30, 2022 included a charge related to the upfront payment of $130 million ~~as a result of acquiring~~to acquire Syndesi Therapeutics ~~SA and its portfolio~~SA. See Note 4 to the Condensed Consolidated Financial Statements for additional information.

Other Operating Expense (Income)

Other operating expense (income), net included a gain of ~~novel modulators of~~$169 million for the synaptic vesicle protein 2A, including its lead molecule SDI-118, which is being evaluated to target nerve terminals to enhance synaptic efficiency. There were no individually significant transactions during the three months ended September 30, 2022. Acquired IPR&D and milestones expense in the three and nine months ended September 30, ~~2021 included~~2023 and a charge of ~~$400~~$229 million as a result of exercising the company’s exclusive right to acquire TeneoOne, an affiliate of Teneobio, Inc., and TNB-383B, a BCMA-targeting immunotherapeutic for the potential treatment of relapsed or refractory multiple myeloma (R/R MM).

~~Other Operating Expense, Net~~

~~Other operating expense, net~~ for the three and nine months ended September 30, 2022 ~~included~~related to a ~~one-time charge of $229 million related to~~development liability associated with an asset divested as part of the Allergan acquisition. ~~Other~~Other operating expense, net for the nine months ended September 30, 2022 also included $172 million of income related to the sale of worldwide commercial rights of a mature brand Pylera, which is used for the treatment of peptic ulcers with an infection by the bacterium ~~Helicobacter~~Helicobactor pylori. See Note 4 to the Condensed Consolidated Financial Statements for additional information.

Other ~~operating~~Non-Operating Expenses (Income)


	Three months ended September 30,				Nine months ended September 30,
(in millions)	2023		2022		2023		2022
Interest expense	$	555	$	560	$	1,660	$	1,664
Interest income	(157)		(63)		(354)		(96)
Interest expense, net	$	398	$	497	$	1,306	$	1,568

Net foreign exchange loss	$	25	$	36	$	97	$	108
Other expense (income), net	(95)		(330)		3,121		427

Interest expense ~~net~~remained flat for the three and nine months ended September 30, ~~2021 included a $500 million charge related~~2023 compared to the ~~extension~~prior year primarily driven by the impact of ~~the Calico Life Sciences LLC collaboration to discover, develop and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer.~~higher interest rates, offset by lower average debt balances as a result of deleveraging.

~~Other Non-Operating Expenses (Income)~~

Three months ended
September 30, Nine months ended
September 30,
(in millions) 2022 2021 2022 2021
Interest expense $ 560 $ 596 $ 1,664 $ 1,843
Interest income (63) (11) (96) (30)
Interest expense, net $ 497 $ 585 $ 1,568 $ 1,813
Net foreign exchange loss $ 36 $ 12 $ 108 $ 35
Other expense (income), net (330) 21 427 2,284

Interest ~~expense decreased~~income increased for the three and nine months ended September 30, ~~2022 compared to the prior year primarily due to a lower average debt balance as a result of deleveraging, partially offset by the impact of higher interest rates.~~

~~Interest income increased for the three and nine months ended September 30, 2022~~2023 compared to the prior year primarily due to the impact of higher interest rates.


2023 Form 10-Q \|			33

Other expense (income), net included charges related to changes in fair value of contingent consideration liabilities of $8 million for the three months and $3.4 billion for the nine months ended September 30, 2023. Other expense (income), net included a benefit related to changes in fair value of contingent consideration liabilities of $214 million for the three months and a charge of $647 million for the nine months ended September 30, ~~2022 and charges of $98 million for the three months and $2.4 billion for the nine months ended September 30, 2021.~~2022. The fair value of contingent consideration liabilities is impacted by the passage of time and multiple other inputs, including the probability of success of achieving regulatory/commercial milestones, discount rates, the estimated amount of future sales of the acquired products and other market-based factors. For the three months ended September 30, 2023, the change in fair value reflected the passage of time offset by higher discount rates. For the nine months ended September 30, 2023, the change in fair value reflected higher Skyrizi sales driven by stronger market share uptake and the passage of time, partially offset by higher discount rates. For the three months ended September 30, 2022, the change in fair value ~~represented~~reflected higher discount rates partially offset by the passage of time. For the nine months ended September 30, 2022, the change in fair value ~~represented~~reflected higher estimated Skyrizi sales driven


~~2022 Form 10-Q~~ \|			33

by stronger market share uptake and the passage of time, partially offset by higher discount rates. For the three months ended September 30, 2021, the change in fair value represented the passage of time partially offset by higher discount rates. For the nine months ended September 30, 2021, the change in fair value represented higher estimated Skyrizi sales driven by stronger market share uptake, favorable Skyrizi clinical results and the passage of time.

Income Tax Expense

The effective tax rate was 9% for the three months and 20% for the nine months ended September 30, 2023 compared to 10% for the three months and 11% for the nine months ended September 30, ~~2022 compared to 14% for the three and nine months ended September 30, 2021.~~2022. The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to the impact of foreign operations which reflects the impact of lower income tax rates in locations outside the United States ~~tax incentives in Puerto Rico~~ and ~~other foreign tax jurisdictions,~~ business development ~~activities~~activities. The effective tax rate for the nine months ended September 30, 2023 and ~~accretion on~~September 30, 2022 and the three months ended September 30, 2022 were also impacted by changes in fair value of contingent consideration. The ~~decrease~~increase in the effective tax rate for the ~~three and~~ nine months ended September 30, ~~2022~~2023 over the prior year was primarily due to ~~differences~~changes in ~~the company’s jurisdictional mix~~fair value of ~~earnings, accretion on~~ contingent ~~consideration, and acquired IPR&D and milestones.~~consideration.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES


		Nine months ended September 30,					Nine months ended September 30,
(in millions)	(in millions)	2022		2021		(in millions)	2023		2022
Cash flows provided by (used in):	Cash flows provided by (used in):					Cash flows provided by (used in):
Operating activities	Operating activities	$	17,515	$	17,702	Operating activities	$	18,086	$	17,515
Investing activities	Investing activities	(175)		(1,199)		Investing activities	(1,209)		(175)
Financing activities	Financing activities	(15,169)		(12,701)		Financing activities	(12,773)		(15,169)

Operating cash flows for the nine months ended September 30, ~~2022 decreased~~2023 increased compared to the prior year ~~primarily~~ due to the timing of working capital ~~cash flows and higher income tax payments,~~ partially offset by ~~improved~~decreased results of operations ~~resulting from revenue growth.~~primarily driven by lower net revenues as well as higher payments for income taxes.

Investing cash flows for the nine months ended September 30, 2023 included payments made for acquisitions and investments of $670 million and capital expenditures of $572 million. Investing cash flows for the nine months ended September 30, 2022 included payments made for acquisitions and investments of $494 million, capital expenditures of $482 million and net sales and maturities of investment securities totaling $32 million. ~~Investing~~

Financing cash flows for the nine months ended September 30, ~~2021~~2023 included ~~payments made for acquisitions~~repayments of $1.0 billion floating rate term loan, $1.0 billion aggregate principal amount of 2.85% senior notes and ~~investments~~$350 million aggregate principal amount of ~~$837 million, capital expenditures of $600 million and net sales and maturities of investment securities totaling $15 million.~~

the company’s 2.80% senior notes. Financing cash flows for the nine months ended September 30, 2022 included repayment of $2.9 billion aggregate principal amount of the company’s 3.45% senior notes, $1.7 billion aggregate principal amount of the company’s 3.25% senior notes and $1.0 billion aggregate principal amount of the company’s 3.2% senior notes. Additionally, financing cash flows included repayment of a $2.0 billion floating rate term loan due May 2025 and issuance of a new $2.0 billion floating rate term loan as part of the term loan refinancing in February 2022. Financing cash flows for the nine months ended September 30, 2021 included repayment of $1.8 billion aggregate principal amount of the company’s 2.3% senior notes, $1.2 billion aggregate principal amount of the company’s 5.0% senior notes, €750 million aggregate principal amount of the company’s 0.5% senior euro notes and $750 million aggregate principal amount of floating rate senior notes. Financing cash flows also included repayment of a $1.0 billion floating rate term loan due May 2023 and issuance of a new $1.0 billion floating rate term loan as part of the term loan refinancing in September 2021.

Financing cash flows also included cash dividend payments of $7.9 billion for the nine months ended September 30, 2023 and $7.5 billion for the nine months ended September 30, ~~2022 and $6.9 billion for the nine months ended September 30, 2021.~~2022. The increase in cash dividend payments was primarily driven by the increase in the quarterly dividend rate.


2023 Form 10-Q \|			34

On September ~~9, 2022,~~8, 2023, the ~~company announced that its~~ board of directors declared a quarterly cash dividend of ~~$1.41~~$1.48 per share for stockholders of record at the close of business on October ~~14, 2022,~~13, 2023, payable on November 15, ~~2022.~~2023. On October ~~28, 2022,~~26, 2023, the ~~company announced that its~~ board of directors declared an increase in the company’s quarterly ~~cash~~ dividend from ~~$1.41~~$1.48 per share to ~~$1.48~~$1.55 per share beginning with the dividend payable on February 15, ~~2023~~2024 to stockholders of record as of January ~~13, 2023.~~16, 2024. This reflects an increase of approximately ~~5.0%~~4.7% over the previous quarterly rate. The timing, declaration, amount of and payment of any dividends by AbbVie in the future is within the discretion of its board of directors and will depend upon many factors, including AbbVie’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie’s debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by its board of directors.

The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management's discretion. The program has no time limit and can be discontinued at any time. On February 16, 2023, AbbVie’s board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization. AbbVie repurchased


~~2022 Form 10-Q~~ \|			34

10 million shares for $1.6 billion during the nine months ended September 30, 2023 and 8 million shares for $1.1 billion during the nine months ended September 30, ~~2022 and 5 million shares for $550 million during the nine months ended September 30, 2021.~~2022.

Credit Risk

AbbVie monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad. AbbVie regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. AbbVie establishes an allowance for credit losses equal to the estimate of future losses over the contractual life of outstanding accounts receivable. AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables.

Credit Facility, Access to Capital and Credit Ratings

Credit Facility

In March 2023, AbbVie ~~currently has a $4.0 billion~~entered into an amended and restated five-year revolving credit facility. The amendment increased the unsecured revolving credit facility ~~that matures in~~commitments from $4.0 billion to $5.0 billion and extended the maturity date of the facility from August ~~2024.~~2023 to March 2028. This credit facility enables the company to borrow funds on an unsecured basis at variable interest rates and contains various covenants. At September 30, ~~2022,~~2023, the company was in compliance with all covenants, and commitment fees under the credit facility were insignificant. No amounts were outstanding under the company's credit facility as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

Access to Capital

The company intends to fund short-term and long-term financial obligations as they mature through cash on hand, future cash flows from operations or has the ability to issue additional debt. The company’s ability to generate cash flows from operations, issue debt or enter into financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for the company’s products or in the solvency of its customers or suppliers, deterioration in the company’s key financial ratios or credit ratings or other material unfavorable changes in business conditions. At the current time, the company believes it has sufficient financial flexibility to issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms to support the company’s growth objectives.

Credit Ratings

In ~~March 2022,~~August 2023, Moody’s Investors Service ~~(Moody’s) affirmed its Baa2~~upgraded AbbVie’s senior unsecured long-term credit rating to A3 with a stable outlook from Baa1 with a positive outlook and ~~the~~affirmed AbbVie’s Prime-2 short-term credit rating. ~~At the same time, Moody’s revised the outlook to positive from stable.~~ Unfavorable changes to the ratings may have an adverse impact on future financing arrangements; however, they would not affect the company’s ability to draw on its credit facility and would not result in an acceleration of scheduled maturities of any of the company’s outstanding debt.

CRITICAL ACCOUNTING POLICIES

A summary of the company’s significant accounting policies is included in Note 2, “Summary of Significant Accounting Policies” in AbbVie's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There have been no significant changes in the company’s application of its critical accounting policies during the nine months ended September 30, ~~2022.~~2023.


2023 Form 10-Q \|			35

FORWARD-LOOKING STATEMENTS

Some statements in this quarterly report on Form 10-Q are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions ~~among others,~~and use of future or conditional verbs, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those ~~indicated~~expressed or implied in the forward-looking statements. Such risks and uncertainties include, but are not limited to ~~failure to realize the expected benefits from AbbVie's acquisition of Allergan, failure to promptly and effectively integrate Allergan's businesses,~~ challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our ~~industry and the impact of public health outbreaks, epidemics or pandemics, such as COVID-19.~~industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie’s operations is set forth in Item 1A, “Risk Factors,” in AbbVie’s Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, which has been filed with the Securities and Exchange Commission. AbbVie notes these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. AbbVie undertakes no obligation, and specifically declines, to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.


~~2022 Form 10-Q~~ \|			35

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of the company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in AbbVie's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. The Chief Executive Officer, Richard A. Gonzalez, and the Chief Financial Officer, Scott T. Reents, evaluated the effectiveness of ~~AbbVie’s~~AbbVie's disclosure controls and procedures as of the end of the period covered by this report, and concluded that ~~AbbVie’s~~AbbVie's disclosure controls and procedures were effective to ensure that information AbbVie is required to disclose in the reports that it files or submits with the Securities and Exchange Commission under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the ~~Commission’s~~Commission's rules and forms, and to ensure that information required to be disclosed by AbbVie in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to ~~AbbVie’s~~AbbVie's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Changes in internal control over financial reporting. There were no changes in ~~AbbVie’s~~AbbVie's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange ~~Act)~~Act of 1934) that have materially affected, or are reasonably likely to materially affect, ~~AbbVie’s~~AbbVie's internal control over financial reporting during the quarter ended September 30, ~~2022.~~2023.

Inherent Limitations on Effectiveness of Controls. AbbVie’s management, including its Chief Executive Officer and its Chief Financial Officer, do not expect that AbbVie’s disclosure controls or internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.


~~2022~~2023 Form 10-Q \|			36

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information pertaining to legal proceedings is provided in Note 12 to the Condensed Consolidated Financial Statements and is incorporated by reference herein.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Period
(a) Total
Number of
Shares
(or Units)
Purchased
(b) Average
Price Paid
per Share
(or Unit) (c) Total Number
of Shares (or
Units) Purchased
as Part of Publicly
Announced Plans
or Programs

(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs
July 1, 2022 - July 31, 2022 893 (1) $152.92 (1) — $1,393,714,917
August 1, 2022 - August 30, 2022 1,023 (1) $140.00 (1) — $1,393,714,917
September 1, 2022 - September 30, 2022 1,052 (1) $137.87 (1) — $1,393,714,917
Total 2,968 (1) $143.13 (1) — $1,393,714,917


Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1, 2023 - July 31, 2023	1,132	(1)	$136.90	(1)	—	$4,808,991,028
August 1, 2023 - August 31, 2023	984	(1)	$149.66	(1)	—	$4,808,991,028
September 1, 2023 - September 30, 2023	1,059	(1)	$144.25	(1)	—	$4,808,991,028
Total	3,175	(1)	$143.31	(1)	—	$4,808,991,028	(2)

1.In addition to AbbVie shares repurchased on the open market under a publicly announced program, if any, these shares also included the shares purchased on the open market for the benefit of participants in the AbbVie Employee Stock Purchase Plan – ~~893~~1,132 in July; ~~1,023~~984 in August; and ~~1,052~~1,059 in September.

2.On February 16, 2023, AbbVie’s board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization.

These shares do not include the shares surrendered to AbbVie to satisfy minimum tax withholding obligations in connection with the vesting or exercise of stock-based awards.

ITEM 5. OTHER ITEMS

During the three months ended September 30, 2023, no director or officer of the company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.


~~2022~~2023 Form 10-Q \|			37

ITEM 6. EXHIBITS

Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be “filed” under the Securities Exchange Act of 1934.


Exhibit No.						Exhibit Description











~~10.~~110.1						Form of Agreement Regarding Change in Control by and between AbbVie Inc. and its named executive officers (incorporated by reference to Exhibit 10.1Amendment to the ~~company's Current Report on Form 8-K filed on October 14, 2022).~~AbbVie 2013 Performance Incentive Plan.*

~~10.2~~						~~AbbVie Deferred Compensation Plan~~ Plus.**

31.1						Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

31.2						Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following financial statements and notes from the AbbVie Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2022,~~2023, filed on November ~~4, 2022,~~6, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Earnings; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to Condensed Consolidated Financial Statements.

104						Cover Page Interactive Data File (the cover page from the AbbVie Inc. Quarterly Report on Form 10-Q formatted as Inline XBRL and contained in Exhibit 101).

* ~~Incorporated herein by reference. Commission file number 001-35565.~~

** Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit hereto.


~~2022~~2023 Form 10-Q \|			38

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						ABBVIE INC.


			By:			/s/ Scott T. Reents
						Scott T. Reents
						~~Senior~~Executive Vice President,
						Chief Financial Officer (Principal Financial Officer)

Date: November ~~4, 2022~~6, 2023


~~2022~~2023 Form 10-Q \|			39


PART I.	FINANCIAL INFORMATION
		Page

Item 1.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	1
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
Item 4.	CONTROLS AND PROCEDURES	36

PART II.	OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	37

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37
Item 5.	OTHER ITEMS	37
Item 6.	EXHIBITS	38