Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | AbbVie Inc. | ||
Entity Central Index Key | 1551152 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $88,854,164,315 | ||
Entity Common Stock, Shares Outstanding | 1,593,886,909 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Statements_of_Ear
Consolidated Statements of Earnings (USD $) | 12 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Condensed Consolidated Statements of Earnings | ||||||
Net sales | $19,960 | $18,790 | $18,380 | |||
Cost of products sold | 4,426 | 4,581 | 4,508 | |||
Selling, general and administrative | 7,724 | 5,352 | 4,989 | |||
Research and development | 3,297 | 2,855 | 2,778 | |||
Acquired in-process research and development | 352 | 338 | 288 | |||
Other expense | 750 | |||||
Total operating costs and expenses | 16,549 | 13,126 | 12,563 | |||
Operating earnings | 3,411 | 5,664 | 5,817 | |||
Interest expense, net | 391 | 278 | 84 | |||
Net foreign exchange loss | 678 | 55 | 17 | |||
Other income, net | -27 | -1 | -9 | |||
Earnings before income tax expense | 2,369 | 5,332 | 5,725 | |||
Income tax expense | 595 | 1,204 | 450 | |||
Net earnings | $1,774 | $4,128 | $5,275 | |||
Per share data | ||||||
Basic earnings per share (in dollars per share) | $1.11 | $2.58 | $3.35 | |||
Diluted earnings per share (in dollars per share) | $1.10 | $2.56 | $3.35 | |||
Cash dividends declared per common share (in dollars per share) | $1.75 | $2 | ||||
Weighted-average basic shares outstanding (in shares) | 1,595 | 1,589 | 1,577 | |||
Weighted-average diluted shares outstanding (in shares) | 1,610 | [1] | 1,604 | [1] | 1,577 | [1] |
[1] | On January 1, 2013, Abbott Laboratories distributed 1,577 million shares of AbbVie common stock. For periods prior to the separation, the weighted-average basic and diluted shares outstanding was based on the number of shares of AbbVie common stock outstanding on the distribution date. Refer to Note 5 for information regarding the calculation of basic and diluted earnings per common share for the years ended December 31, 2014 and 2013. |
Consolidated_Statements_of_Ear1
Consolidated Statements of Earnings (Parenthetical) (USD $) | 0 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Jan. 01, 2013 |
Abbott | Common Stock [Member] | |
Common stock, shares distributed | 1,577 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Income | |||
Net earnings | $1,774 | $4,128 | $5,275 |
Foreign currency translation adjustments, net of tax (benefit) expense of $(158) in 2014 and $71 in 2013 | -1,073 | 48 | 173 |
Pension and post-employment benefits, net of tax (benefit) expense of $(351) in 2014, $309 in 2013 and $(24) in 2012 | -781 | 598 | -150 |
Unrealized (losses) gains on marketable equity securities, net of tax expense (benefit) of $1 in 2014, $- in 2013, and $(15) in 2012 | 1 | 1 | -25 |
Hedging activities, net of tax expense (benefit) of $8 in 2014, $- in 2013, and $(8) in 2012 | 264 | -77 | -27 |
Other comprehensive income (loss) | -1,589 | 570 | -29 |
Comprehensive income | $185 | $4,698 | $5,246 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Income | |||
Foreign currency translation adjustments, tax (benefit) expense | ($158) | $71 | |
Pension and post-employment benefits, tax (benefit) expense | -351 | 309 | -24 |
Unrealized (losses) gains on marketable equity securities, tax expense (benefit) | 1 | -15 | |
Hedging activities, tax expense (benefit) | $8 | ($8) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets | ||
Cash and equivalents | $8,348 | $9,595 |
Short-term investments | 26 | 300 |
Accounts and other receivables, net | 3,735 | 3,854 |
Inventories, net | 1,124 | 1,150 |
Income tax receivable | 556 | 949 |
Deferred income taxes | 896 | 766 |
Prepaid expenses and other | 1,403 | 1,234 |
Total current assets | 16,088 | 17,848 |
Investments | 92 | 118 |
Property and equipment, net | 2,485 | 2,298 |
Intangible assets, net of amortization | 1,513 | 1,890 |
Goodwill | 5,862 | 6,277 |
Other assets | 1,507 | 767 |
Total assets | 27,547 | 29,198 |
Current liabilities | ||
Short-term borrowings | 425 | 413 |
Current portion of long-term debt and lease obligations | 4,021 | 18 |
Accounts payable and accrued liabilities | 6,954 | 6,448 |
Total current liabilities | 11,400 | 6,879 |
Long-term liabilities | 3,840 | 3,535 |
Long-term debt and lease obligations | 10,565 | 14,292 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value, authorized 4,000,000,000 shares, issued 1,609,519,046 and 1,594,260,996 shares as of December 31, 2014 and 2013, respectively | 16 | 16 |
Common stock held in treasury, at cost, 18,129,715 and 6,900,434 shares as of December 31, 2014 and 2013, respectively | -972 | -320 |
Additional paid-in-capital | 4,194 | 3,671 |
Retained earnings | 535 | 1,567 |
Accumulated other comprehensive loss | -2,031 | -442 |
Total stockholders' equity | 1,742 | 4,492 |
Total liabilities and equity | $27,547 | $29,198 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Common stock, issued (in shares) | 1,609,519,046 | 1,594,260,996 |
Common stock held in treasury, at cost (in shares) | 18,129,715 | 6,900,434 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Common Stock [Member] | Treasury Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive loss [Member] | Retained Earnings [Member] | Parent Company [Member] | Total |
In Millions, unless otherwise specified | |||||||
Balance at Dec. 31, 2011 | ($25) | $11,957 | $11,932 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 5,275 | 5,275 | |||||
Net transactions with Abbott Laboratories | -13,519 | -13,519 | |||||
Assumption of accumulated unrealized losses on pension and other post-employment benefits, net of tax benefit of $36 | -296 | -296 | |||||
Other comprehensive income (loss), net of tax | -29 | -29 | |||||
Balance at Dec. 31, 2012 | -350 | 3,713 | 3,363 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Separation-related adjustments | -1,316 | -662 | 707 | -1,271 | |||
Reclassification of parent company net investment in connection with separation | 4,420 | -4,420 | |||||
Issuance of common stock at separation | 16 | -16 | |||||
Issuance of common stock at separation (in shares) | 1,577 | ||||||
Net earnings | 4,128 | 4,128 | |||||
Other comprehensive income (loss), net of tax | 570 | 570 | |||||
Dividends declared | -2,561 | -2,561 | |||||
Share repurchases | -223 | -223 | |||||
Share repurchases (in shares) | -4 | -4 | |||||
Stock-based compensation plans, net of tax benefits of $(44) and $(38), and other in 2014 and 2013, respectively | -97 | 583 | 486 | ||||
Stock-based compensation plans and other (in shares) | 14 | ||||||
Balance (in shares) at Dec. 31, 2013 | 1,587 | ||||||
Balance at Dec. 31, 2013 | 16 | -320 | 3,671 | -442 | 1,567 | 4,492 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 1,774 | 1,774 | |||||
Other comprehensive income (loss), net of tax | -1,589 | -1,589 | |||||
Dividends declared | -2,806 | -2,806 | |||||
Share repurchases | -550 | -550 | |||||
Share repurchases (in shares) | -9 | -9 | |||||
Stock-based compensation plans, net of tax benefits of $(44) and $(38), and other in 2014 and 2013, respectively | -102 | 523 | 421 | ||||
Stock-based compensation plans and other (in shares) | 13 | ||||||
Balance (in shares) at Dec. 31, 2014 | 1,591 | ||||||
Balance at Dec. 31, 2014 | $16 | ($972) | $4,194 | ($2,031) | $535 | $1,742 |
Consolidated_Statements_of_Equ1
Consolidated Statements of Equity (Parenthetical) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 |
Consolidated Statements of Equity | |
Assumption of accumulated unrealized loss on pension and other post-employment benefits, tax benefit | $36 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | ||||
Net earnings | $1,774 | $4,128 | $5,275 | |
Adjustments to reconcile net earnings to net cash from operating activities: | ||||
Depreciation | 383 | 388 | 525 | |
Amortization of intangible assets | 403 | 509 | 625 | |
Stock-based compensation | 241 | 212 | 187 | |
Upfront costs related to collaborations and acquired in-process research and development | 1,102 | 338 | 288 | |
Other, net | 434 | 34 | 66 | |
Changes in operating assets and liabilities, net of acquisitions: | ||||
Accounts and other receivables | -172 | 681 | 223 | |
Inventories | -203 | -56 | -203 | |
Prepaid expenses and other assets | -220 | 459 | 90 | |
Accounts payable and other liabilities | -193 | -426 | -731 | |
Cash flows from operating activities | 3,549 | [1] | 6,267 | 6,345 |
Cash flows from investing activities | ||||
Acquisitions and investments, net of cash acquired | -622 | -405 | -688 | |
Acquisitions of property and equipment | -612 | -491 | -333 | |
Purchases of investment securities | -1,169 | -930 | -2,550 | |
Sales and maturities of investment securities | 1,477 | 2,705 | 1,153 | |
Cash flows from investing activities | -926 | 879 | -2,418 | |
Cash flows from financing activities | ||||
Net change in short-term borrowings | 12 | -601 | 1,000 | |
Dividends paid | -2,661 | -2,555 | ||
Purchases of treasury stock | -652 | -320 | ||
Proceeds from the exercise of stock options | 225 | 347 | ||
Proceeds from issuance of long-term debt | 14,586 | |||
Net transactions with Abbott Laboratories, excluding noncash items | -247 | -13,504 | ||
Other, net | -217 | -66 | -151 | |
Cash flows from financing activities | -3,293 | -3,442 | 1,931 | |
Effect of exchange rate changes on cash and equivalents | -577 | -10 | 16 | |
Net (decrease) increase in cash and equivalents | -1,247 | 3,694 | 5,874 | |
Cash and equivalents, beginning of period | 9,595 | 5,901 | 27 | |
Cash and equivalents, end of period | 8,348 | 9,595 | 5,901 | |
Other supplemental information | ||||
Interest paid, net of portion capitalized | 419 | 283 | 61 | |
Income taxes paid | $498 | $1,305 | ||
[1] | Cash flows from operating activities included the impact of transaction and financing-related and other costs incurred in connection with the terminated proposed combination with Shire. Refer to Note 4 for additional information. |
Background_and_Basis_of_Presen
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2014 | |
Background and Basis of Presentation | |
Background and Basis of Presentation | Note 1 Background and Basis of Presentation |
Background | |
The principal business of AbbVie Inc. (AbbVie or the company) is the discovery, development, manufacture and sale of a broad line of pharmaceutical products. 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. Substantially all of AbbVie's sales in the United States are to three wholesalers. Outside the United States, products are sold primarily to customers or through distributors, depending on the market served. | |
AbbVie was incorporated in Delaware on April 10, 2012. On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories (Abbott) of 100 percent of the outstanding common stock of AbbVie to Abbott's shareholders (the separation). On January 1, 2013, Abbott's shareholders of record as of the close of business on December 12, 2012, received one share of AbbVie common stock for every one share of Abbott common stock held as of the record date. AbbVie's common stock began trading "regular-way" under the ticker symbol "ABBV" on the New York Stock Exchange on January 2, 2013. | |
During the year ended 2013, separation-related adjustments totaling $1.3 billion were recorded in stockholders' equity. Separation-related adjustments to additional paid-in capital principally reflected dividends to AbbVie shareholders that were declared from pre-separation earnings during the first quarter of 2013 and the transfer of certain pension plan liabilities and assets from Abbott to AbbVie upon the legal split of those plans in 2013. In addition, because the historical financial statements were derived from Abbott's records, separation-related adjustments also included an adjustment to accumulated other comprehensive loss to reflect the appropriate opening balances associated with currency translation adjustments related to AbbVie's legal entities at the separation date. Refer to Note 11 for further information regarding the separation of the pension plans. | |
In connection with the separation, AbbVie and Abbott entered into transition services agreements covering certain corporate support and back office services that AbbVie historically received from Abbott. Such services include information technology, accounts payable, payroll, receivables collection, treasury and other financial functions, as well as order entry, warehousing, engineering support, quality assurance support and other administrative services. These agreements facilitate the separation by allowing AbbVie to operate independently prior to establishing stand-alone back office functions across its organization. Transition services may be provided for up to 24 months, with an option for a one-year extension. The majority of these transaction service agreements expired without extension at December 31, 2014. | |
During the years ended December 31, 2014, 2013 and 2012, AbbVie incurred $445 million, $254 million, and $288 million, respectively, of separation-related expenses including legal, information technology and regulatory fees, which were principally classified in selling, general and administrative expenses (SG&A) in the consolidated statements of earnings. | |
Basis of Historical Presentation | |
For a certain portion of AbbVie's operations, the legal transfer of AbbVie's assets (net of liabilities) did not occur with the separation of AbbVie on January 1, 2013 due to the time required to transfer marketing authorizations and satisfy other regulatory requirements in certain countries. Under the terms of the separation agreement with Abbott, AbbVie is responsible for the business activities conducted by Abbott on its behalf, and is subject to the risks and entitled to the benefits generated by these operations and assets. As a result, the related assets and liabilities and results of operations have been reported in AbbVie's consolidated financial statements as of and for the years ended December 31, 2014 and 2013. Net sales related to these operations for the years ended December 31, 2014 and 2013 totaled approximately $282 million and $738 million, respectively. At December 31, 2014, the assets and liabilities consisted primarily of accounts receivable of $27 million, inventories of $16 million, other assets of $33 million and accounts payable and other accrued liabilities of $50 million. At December 31, 2013, the assets and liabilities consisted primarily of accounts receivable of $62 million, inventories of $190 million, other assets of $93 million and accounts payable and other accrued liabilities of $212 million. The majority of these operations are expected to be transferred to AbbVie by the end of 2015. | |
Prior to the separation on January 1, 2013, the historical financial statements of AbbVie were prepared on a stand-alone basis and were derived from Abbott's consolidated financial statements and accounting records as if the former research-based pharmaceutical business of Abbott had been part of AbbVie for all periods presented. Accordingly, AbbVie's financial statements for periods prior to January 1, 2013 are presented herein on a combined basis and reflect AbbVie's financial position, results of operations and cash flows as its business was operated as part of Abbott prior to the separation, in conformity with U.S. generally accepted accounting principles (GAAP). | |
The historical combined financial statements included the allocation of certain assets and liabilities that were historically held at the Abbott corporate level but which were specifically identifiable or allocable to AbbVie. Prior to 2012, cash and equivalents, short-term investments and restricted funds held by Abbott were not allocated to AbbVie unless those assets were held by an entity that was transferred to AbbVie. As of December 31, 2012, AbbVie's combined balance sheet reflected the direct holdings of AbbVie legal entities. Prior to November 2012, long-term debt and short-term borrowings were not allocated to AbbVie as none of the debt recorded by Abbott was directly attributable to or guaranteed by AbbVie. In November 2012, AbbVie issued $14.7 billion of long-term debt with maturities ranging from three to 30 years and $1.0 billion of commercial paper, which was reflected on AbbVie's combined balance sheet as of December 31, 2012. All AbbVie intracompany transactions and accounts were eliminated. Prior to 2012, all intercompany transactions between AbbVie and Abbott were considered to be effectively settled in the historical combined financial statements at the time the transactions were recorded. As a result, the total net effect of the settlement of these intercompany transactions was reflected in the combined statement of cash flows for the year ended December 31, 2012 as a financing activity and in the combined balance sheet as of December 31, 2012 as net parent company investment in AbbVie. As of December 31, 2012, outstanding transactions between AbbVie and Abbott were reflected in the combined balance sheet outside of net parent company investment in AbbVie Inc. As of December 31, 2014 and 2013, the aggregate amount due from Abbott totaled $526 million and $738 million, respectively, and was primarily classified in accounts and other receivables, net in AbbVie's consolidated balance sheets. The aggregate amount due to Abbott totaled $536 million and $876 million as of December 31, 2014 and 2013, respectively, and was classified in accounts payable and accrued liabilities in AbbVie's consolidated balance sheets. | |
Prior to the separation on January 1, 2013, Abbott provided AbbVie certain services, which included administration of treasury, payroll, employee compensation and benefits, travel and meeting services, public and investor relations, real estate services, internal audit, telecommunications, information technology, corporate income tax and selected legal services. Some of these services continue to be provided to AbbVie on a temporary basis after the separation pursuant to certain transition services agreements. AbbVie's historical combined financial statements for periods prior to January 1, 2013 reflect an allocation of expenses related to these services. These expenses were allocated to AbbVie based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. AbbVie considers the expense allocation methodology and results to be reasonable. However, the allocations may not be indicative of the actual expenses that would have been incurred had AbbVie operated as an independent, publicly-traded company for the periods prior to January 1, 2013. These allocations totaled $838 million for the year ended December 31, 2012. | |
Prior to the separation on January 1, 2013, AbbVie employees participated in various benefits and stock-based compensation programs maintained by Abbott. A portion of the cost of those programs was included in AbbVie's historical combined financial statements. See Note 11 and Note 12 for a further description of the accounting for post-employment benefits and stock-based compensation, respectively. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Summary of Significant Accounting Policies | ||||||||
Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies | |||||||
Use of Estimates | ||||||||
The financial statements have been prepared in accordance with U.S. GAAP and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for sales rebates, pension and post-employment benefits, income taxes, litigation, valuation of intangible assets and goodwill, financial instruments, and inventory and accounts receivable exposures. | ||||||||
Basis of Consolidation | ||||||||
The consolidated financial statements as of and for the years ended December 31, 2014 and 2013 include the accounts of AbbVie and all of its subsidiaries in which a controlling interest is maintained. Controlling interest is determined by majority ownership interest and the absence of substantive third-party participating rights or, in the case of variable interest entities, where AbbVie is determined to be the primary beneficiary. Investments in companies over which AbbVie has a significant influence but not a controlling interest are accounted for using the equity method with AbbVie's share of earnings or losses reported in other income, net. All other investments are generally accounted for using the cost method. Intercompany balances and transactions are eliminated. | ||||||||
Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period presentation. | ||||||||
Revenue Recognition | ||||||||
AbbVie recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability of the sales price is reasonably assured. Revenue from product sales is recognized when title and risk of loss have passed to the customer. Provisions for discounts, rebates and sales incentives to customers and returns and other adjustments are provided for in the period the related sales are recorded. Sales incentives to customers are not material. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer's normal requirements are recorded when the conditions noted above are met. In those situations, management records a returns reserve for such revenue, if necessary. Sales of product rights for marketable products are recorded as revenue upon disposition of the rights. | ||||||||
Research and Development Costs | ||||||||
Internal research and development (R&D) costs are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development collaborations for pre-commercialization milestones, the milestone payment obligations are expensed when the milestone results are achieved. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in intangible assets, net of accumulated amortization. | ||||||||
Collaborations and Other Arrangements | ||||||||
The company enters into collaborative agreements with third parties to develop and commercialize drug candidates. Collaborative activities may include joint research and development and commercialization of new products. AbbVie generally receives certain licensing rights under these arrangements. These collaborations often require upfront payments and may include additional milestone, research and development cost sharing, royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development and commercialization. Upfront payments associated with collaborative arrangements during the development stage are expensed to acquired in-process research and development (IPR&D). Subsequent payments made to the partner for the achievement of milestones during the development stage are expensed to R&D when the milestone is achieved. Milestone payments made to the partner subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of products sold over the estimated useful life of the related asset. Royalties are expensed as cost of products sold when incurred. | ||||||||
Advertising | ||||||||
Costs associated with advertising are expensed as incurred and are included in SG&A in AbbVie's consolidated statements of earnings. Advertising expenses were $665 million, $626 million, and $506 million in 2014, 2013 and 2012, respectively. | ||||||||
Pension and Post-Employment Benefits | ||||||||
AbbVie records annual expenses relating to its defined benefit pension and other post-employment plans based on calculations which include various actuarial assumptions, including discount rates, assumed asset rates of return, compensation increases, turnover rates and health care cost trend rates. AbbVie reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. Actuarial losses and gains are amortized over the remaining service attribution periods of the employees under the corridor method, in accordance with the rules for accounting for post-employment benefits. Differences between the expected long-term return on plan assets and the actual annual return are amortized to net period benefit cost over a five-year period. | ||||||||
Prior to separation, AbbVie employees participated in certain defined benefit pension and other post-employment plans sponsored by Abbott, which included participants of Abbott's other businesses. Such plans were accounted for as multiemployer plans in AbbVie's historical combined financial statements as of and for the year ended December 31, 2012. As a result, no asset or liability was recorded by AbbVie in the historical combined balance sheets to recognize the funded status of these plans. In 2013, subsequent to the separation from Abbott, AbbVie's portion of the defined benefit pension plans was separated from the Abbott defined benefit pension plans using a December 31, 2012 measurement date. As a result, the funded status for each plan is reflected in AbbVie's consolidated balance sheets as of December 31, 2014 and 2013. AbbVie is the sole sponsor for certain defined benefit pension and other post-employment plans. The funded status of these plans was recorded in AbbVie's combined balance sheet at December 31, 2012 and the consolidated balance sheets at December 31, 2014 and 2013. | ||||||||
Refer to Note 11 for information regarding AbbVie's pension and post-employment plans. | ||||||||
Income Taxes | ||||||||
Income taxes are accounted for under the asset and liability method. Provisions for federal, state and foreign income taxes are calculated on reported pretax earnings based on current tax laws. Deferred taxes are provided using enacted tax rates on the future tax consequences of temporary differences, which are the differences between the financial statement carrying amount of assets and liabilities and their respective tax bases and the tax benefits of carryforwards. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. | ||||||||
In AbbVie's financial statements for periods prior to 2013, income tax expense and tax balances were calculated as if AbbVie was a separate taxpayer, although AbbVie's operations were historically included in tax returns filed by Abbott. After separation, AbbVie's income tax expense and income tax balances represent AbbVie's federal, state and foreign income taxes as an independent company. As a result, its effective tax rate and income tax balances are not necessarily comparable to those for periods prior to the separation. | ||||||||
Cash and Equivalents | ||||||||
Cash and equivalents include time deposits, money market funds, and treasury securities with original maturities at the time of purchase of three months or less. | ||||||||
Investments | ||||||||
Short-term investments consist primarily of time deposits and held-to-maturity debt. Investments in marketable equity securities are classified as available-for-sale and are recorded at fair value with any unrealized holding gains or losses, net of tax, included in accumulated other comprehensive loss in AbbVie's consolidated balance sheets. Investments in equity securities that are not traded on public stock exchanges and held-to-maturity debt securities are recorded at cost. | ||||||||
AbbVie reviews the carrying value of investments each quarter to determine whether an other than temporary decline in fair value exists. AbbVie considers factors affecting the investee, factors affecting the industry the investee operates in and general equity market trends. The company considers the length of time an investment's fair value has been below cost and the near-term prospects for recovery. When AbbVie determines that an other than temporary decline has occurred, the cost basis investment is written down with a charge to other income, net and the available-for-sale securities' unrealized loss is recognized as a charge to income and removed from accumulated other comprehensive loss (AOCI). | ||||||||
Accounts Receivable | ||||||||
Accounts receivable are stated at their net realizable value. The allowance against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Accounts receivable are written off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. The allowance was $74 million at December 31, 2014 and $88 million at December 31, 2013. | ||||||||
Inventories | ||||||||
Inventories are valued at the lower of cost (first-in, first-out basis) or market. Cost includes material and conversion costs. Inventories, net, consist of the following: | ||||||||
as of December 31 (in millions) | 2014 | 2013 | ||||||
| | | | | | | | |
Finished goods | $ | 341 | $ | 485 | ||||
Work-in-process | 629 | 404 | ||||||
Materials | 154 | 261 | ||||||
| | | | | | | | |
Inventories, net | $ | 1,124 | $ | 1,150 | ||||
| | | | | | | | |
| | | | | | | | |
Property and Equipment | ||||||||
as of December 31 (in millions) | 2014 | 2013 | ||||||
| | | | | | | | |
Land | $ | 48 | $ | 50 | ||||
Buildings | 1,228 | 1,263 | ||||||
Equipment | 5,324 | 5,214 | ||||||
Construction in progress | 505 | 382 | ||||||
| | | | | | | | |
Property and equipment, gross | 7,105 | 6,909 | ||||||
Less accumulated depreciation | (4,620 | ) | (4,611 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 2,485 | $ | 2,298 | ||||
| | | | | | | | |
| | | | | | | | |
Depreciation for property and equipment is recorded on a straight-line basis over the estimated useful lives of the assets. The estimated useful life for buildings ranges from 10 to 50 years and five to 20 years for equipment. Leasehold improvements are amortized over the life of the related facility lease (including any renewal periods, if appropriate) or the asset, whichever is shorter. Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $383 million, $388 million and $525 million, respectively. Equipment includes certain computer software and software development costs incurred in connection with developing or obtaining software for internal use and is amortized over three to 10 years. Assets under capital leases included in property and equipment in the consolidated balance sheets are not material. | ||||||||
Litigation | ||||||||
Loss contingency provisions are recorded for probable losses when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. When a best estimate cannot be made, the minimum loss contingency amount in a probable range is recorded. Legal fees are expensed as incurred. | ||||||||
Product Liability | ||||||||
AbbVie accrues for product liability claims, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The liabilities are adjusted quarterly as additional information becomes available. Receivables for insurance recoveries, if any, for product liability claims are recorded as assets, on an undiscounted basis, when it is probable that a recovery will be realized. | ||||||||
Business Combinations | ||||||||
Results of operations of acquired companies are included in AbbVie's results of operations beginning on the respective acquisition dates. Assets acquired and liabilities assumed are recognized at the date of acquisition at their respective fair values. Any excess of the fair value consideration transferred over the estimated fair values of the net assets acquired is recognized as goodwill. Contingent consideration is recognized at the estimated fair value on the acquisition date, which is determined by utilizing a probability weighted discounted cash flow model. Subsequent changes to the fair value of contingent payments are recognized in other income, net in the consolidated statements of earnings. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred. | ||||||||
Goodwill and Intangible Assets | ||||||||
Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, and terminal values of market participants. Definite-lived intangibles are amortized over their estimated useful lives. AbbVie reviews the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. AbbVie first compares the projected undiscounted cash flows to be generated by the asset to its carrying value. If the undiscounted cash flows of an intangible asset are less than the carrying value of an intangible asset, the intangible asset is written down to its fair value, which is usually the discounted cash flow amount, and a loss is recorded equal to the excess of the asset's net carrying value over its fair value. Where cash flows cannot be identified for an individual asset, the review is applied at the lowest level for which cash flows are largely independent of the cash flows of other assets and liabilities. | ||||||||
Goodwill and indefinite-lived assets are not amortized but are subject to an impairment review annually and more frequently when indicators of impairment exist. An impairment of goodwill would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. Indefinite-lived intangible assets, which consist of capitalized IPR&D, would occur if the fair value of the IPR&D intangible asset is less than the carrying amount. | ||||||||
The company tests its goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If the company concludes it is more likely than not that the fair value of reporting unit is less than its carrying amount, a quantitative impairment test is performed. AbbVie tests indefinite-lived intangible assets using a quantitative impairment test. For its quantitative impairment tests, the company uses an estimated future cash flow approach that requires significant judgment with respect to future volume, revenue and expense growth rates, changes in working capital use, foreign currency exchange rates, the selection of an appropriate discount rate, asset groupings and other assumptions and estimates. The estimates and assumptions used are consistent with the company's business plans and a market participant's views of a company and similar companies. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the assets, and potentially result in different impacts to the company's results of operations. Actual results may differ from the company's estimates. | ||||||||
Based upon the company's most recent annual impairment test performed in the third quarter of 2014, the company concluded goodwill was not impaired. In 2014, AbbVie recorded an impairment charge of $37 million related to certain on-market product rights in Japan due to increased generic competition. The charge was included in cost of products sold. In 2012, AbbVie recorded impairment charges of $13 million for certain projects under development. These charges were included in R&D expense. There were no impairment charges recorded in 2013. | ||||||||
Acquired In-Process Research and Development | ||||||||
The initial costs of rights to IPR&D projects acquired in an asset acquisition are expensed as IPR&D unless the project has an alternative future use. These costs include initial payments incurred prior to regulatory approval in connection with research and development collaboration agreements that provide rights to develop, manufacture, market and/or sell pharmaceutical products. The fair value of IPR&D projects acquired in a business combination are capitalized and accounted for as indefinite-lived intangible assets until the underlying project receives regulatory approval, at which point the intangible asset will be accounted for as a definite-lived intangible asset, or discontinuation, at which point the intangible asset will be written off. Development costs incurred after the acquisition are expensed as incurred. Indefinite- and definite-lived assets are subject to impairment reviews as discussed previously. | ||||||||
Foreign Currency Translation | ||||||||
Foreign subsidiary earnings are translated into U.S. dollars using average exchange rates. The net assets of foreign subsidiaries are translated into U.S. dollars using period end exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recognized in other comprehensive (loss) income. The net assets of subsidiaries in highly inflationary economies are remeasured as if the functional currency were the reporting currency. The remeasurement is recognized in earnings and is immaterial for all years presented. | ||||||||
Derivatives | ||||||||
All derivative instruments are recognized as either assets or liabilities at fair value in AbbVie's balance sheets and are classified as current or long-term based on the scheduled maturity of the instrument. The accounting for changes in the fair value of a derivative instrument depends on whether it has been formally designated and qualifies as part of a hedging relationship under the applicable accounting standards and, further, on the type of hedging relationship. | ||||||||
For derivatives formally designated as hedges, the company assesses at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The changes in fair value of a derivative designated as a fair value hedge and of the hedged item attributable to the hedge risk are recognized in earnings immediately. Fair value hedges are used to hedge the interest rate risk associated with certain of the company's fixed-rate debt. The effective portions of changes in the fair value of a derivative designated as a cash flow hedge are reported in accumulated other comprehensive loss and are subsequently recognized in earnings consistent with the underlying hedged item. Cash flow hedges are used to manage exposures from changes in foreign currency exchange rates. | ||||||||
The derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings. If it is determined that a derivative is no longer highly effective as a hedge, the company discontinues hedge accounting prospectively. Gains or losses are immediately reclassified from accumulated other comprehensive loss to earnings relating to hedged forecasted transactions that are no longer probable of occurring. Gains or losses relating to terminations of effective cash flow hedges in which the forecasted transactions are still probable of occurring are deferred and recognized consistent with the income or loss recognition of the underlying hedged items. Terminations of a fair value hedges result in fair value adjustments to the hedged items until the date of termination with the new bases being accreted to par value on the date of maturity. | ||||||||
Derivatives, including those that are not designated as a hedge, are principally classified in the operating section of the consolidated statements of cash flows, consistent with the underlying hedged item. | ||||||||
Refer to Note 10 for information regarding AbbVie's derivative and hedging activities. | ||||||||
Recent Accounting Pronouncements | ||||||||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40). The amendments in ASU 2014-09 supersede most current revenue recognition requirements. The core principal of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. AbbVie is currently assessing the impact of adopting this guidance to its consolidated financial statements. | ||||||||
Supplemental_Financial_Informa
Supplemental Financial Information | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplemental Financial Information | |||||||||||
Supplemental Financial Information | Note 3 Supplemental Financial Information | ||||||||||
Interest Expense, Net | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Interest expense | $ | 429 | $ | 299 | $ | 104 | |||||
Interest and dividend income | (38 | ) | (21 | ) | (20 | ) | |||||
| | | | | | | | | | | |
Interest expense, net | $ | 391 | $ | 278 | $ | 84 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Interest expense, net in 2014 included $141 million of financing related fees incurred in connection with the terminated proposed combination with Shire. | |||||||||||
Other Income, Net | |||||||||||
Other income, net, includes income from the resolution of certain contractual agreements, fair value adjustments to contingent consideration, and impairments of equity securities. Other income, net in 2014 primarily consisted of income of $34 million from the resolution of a contractual agreement. | |||||||||||
Accounts Payable and Accrued Liabilities | |||||||||||
as of December 31 (in millions) | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Sales rebates | $ | 1,384 | $ | 1,401 | |||||||
Accounts payable | 881 | 933 | |||||||||
Due to Abbott Laboratories | 536 | 876 | |||||||||
Dividends payable | 791 | 643 | |||||||||
Salaries, wages and commissions | 623 | 621 | |||||||||
Royalty license arrangements | 821 | 443 | |||||||||
Other | 1,918 | 1,531 | |||||||||
| | | | | | | | ||||
Accounts payable and accrued liabilities | $ | 6,954 | $ | 6,448 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Long-Term Liabilities | |||||||||||
as of December 31 (in millions) | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Deferred income taxes | $ | 630 | $ | 570 | |||||||
Pension and other post-employment benefits | 2,220 | 1,628 | |||||||||
Other | 990 | 1,337 | |||||||||
| | | | | | | | ||||
Long-term liabilities | $ | 3,840 | $ | 3,535 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Termination_of_Proposed_Combin
Termination of Proposed Combination with Shire | 12 Months Ended |
Dec. 31, 2014 | |
Termination of Combination with Shire | |
Termination of Proposed Combination with Shire | Note 4 Termination of Proposed Combination with Shire |
On October 15, 2014, AbbVie's board of directors withdrew its previous recommendation to AbbVie stockholders in favor of a proposed combination with Shire plc, a company incorporated in Jersey (Shire), and recommended stockholders vote against the proposed combination. On October 20, 2014, AbbVie and Shire mutually agreed to terminate the proposed combination. During the year-ended December 31, 2014, the company incurred transaction and financing-related costs totaling $1.8 billion, of which $1.7 billion was recorded in SG&A expense and $141 million was recorded in interest expense. Included in SG&A expense was a break fee of $1.6 billion, which is tax deductible, paid by AbbVie to Shire in October 2014 as a result of the termination of the proposed combination. In addition, the company recorded $666 million of net foreign exchange losses primarily due to undesignated forward contracts that were entered into to hedge anticipated foreign currency cash outflows associated with the terminated proposed combination with Shire and the exit of certain foreign currency positions. The forward contracts were settled in 2014. AbbVie expects to record additional foreign exchange losses of $170 million in the first quarter of 2015 to reflect the completed liquidation of its remaining foreign currency positions. Refer to Note 10 for further information regarding these forward contracts and to Note 9 for further information regarding certain credit facilities entered into in anticipation of the proposed combination with Shire. | |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2014 | |
Earnings Per Share | |
Earnings Per Share | Note 5 Earnings Per Share |
For periods subsequent to the separation, AbbVie calculated basic earnings per share (EPS) pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. In addition, participating securities may include certain performance-based awards that may otherwise have been excluded from the calculation of EPS under the treasury-stock method. AbbVie's forfeitable restricted stock units (RSUs) and restricted stock awards (RSAs), including most performance-based awards, participate in dividends on the same basis as common shares and such dividends are nonforfeitable to the holder once declared. As a result, these forfeitable RSUs and RSAs meet the definition of a participating security. | |
The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock or the two-class method. For the years ended December 31, 2014 and 2013, the two-class method was more dilutive. As such, the dilutive effect of outstanding RSUs and RSAs for the years ended December 31, 2014 and 2013 of approximately 4 million and 5 million, respectively, was excluded from the denominator for the calculation of diluted EPS. These awards otherwise would have been included in the calculation of EPS under the treasury stock method. Additionally, all earnings (distributed and undistributed) allocable to participating securities, including performance-based awards not otherwise included in the calculation of EPS under the treasury-stock method, were excluded from the numerator for the calculation of basic and diluted earnings per share under the two-class method. Earnings allocable to participating securities for the years ended December 31, 2014 and 2013 were approximately $9 million and $26 million, respectively. | |
For the years ended December 31, 2014 and 2013, approximately 0.4 million and 1 million common shares issuable under stock-based compensation plans were excluded from the computation of earnings per common share assuming dilution because the effect would have been antidilutive. | |
For periods prior to the separation, the numerator for both basic and diluted EPS was net earnings attributable to AbbVie. The denominator for basic and diluted EPS was calculated using the 1,577 million AbbVie common shares outstanding immediately following the separation. The same number of shares was used to calculate basic and diluted earnings per share since no AbbVie equity awards were outstanding prior to the separation. | |
Acquisitions_Collaborations_an
Acquisitions, Collaborations and Other Arrangements | 12 Months Ended |
Dec. 31, 2014 | |
Acquisitions, Collaborations and Other Arrangements | |
Acquisitions, Collaborations and Other Arrangements | Note 6 Acquisitions, Collaborations and Other Arrangements |
In 2014, 2013 and 2012, cash outflows related to collaborations, the acquisition of product rights and other arrangements totaled $622 million, $405 million and $688 million, respectively. AbbVie recorded IPR&D charges of $352 million, $338 million and $288 million in 2014, 2013 and 2012, respectively. In 2014, AbbVie also recorded other expenses of $750 million related to a collaboration. Significant arrangements impacting 2014, 2013 and 2012, some of which require contingent milestone payments, are summarized below. In addition to the significant arrangements described below, AbbVie entered several other arrangements resulting in charges to IPR&D of $77 million in 2014 and $48 million in 2013 and upon the achievement of certain development, regulatory and commercial milestones, could make additional payments of up to $966 million and $894 million related to arrangements entered into in 2014 and 2013, respectively. It is not possible to predict with reasonable certainty whether these milestones will be achieved or the timing for achievement. | |
Significant arrangements impacting 2014, 2013 and 2012, some of which require contingent milestone payments, include the following: | |
Calico Life Sciences LLC | |
In September 2014, AbbVie and Calico Life Sciences LLC (Calico) entered into a novel R&D collaboration agreement to discover, develop and commercialize new therapies for patients with age-related diseases, including neurodegeneration and cancer. In 2014, AbbVie recorded $750 million in other expense in the consolidated statement of operations related to its commitments under the agreement of which $250 million was paid in 2014 and $500 million was paid in early 2015. Calico will be responsible for research and early development during the first five years and continue to advance collaboration projects through Phase 2a for a ten year period. AbbVie will have the option to exclusively license collaboration compounds after completion of Phase 2a. AbbVie will support Calico in its early R&D efforts and, upon option exercise, would be responsible for all late-stage development and commercial activities. Collaboration costs and profits will be shared equally by both companies post option exercise. | |
Infinity Pharmaceuticals, Inc. | |
In September 2014, AbbVie entered into a global collaboration agreement with Infinity Pharmaceuticals, Inc. (Infinity) to develop and commercialize duvelisib (IPI-145) for the treatment of patients with cancer. As part of the agreement, AbbVie made an initial upfront payment of $275 million, which was expensed to IPR&D in the third quarter of 2014. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $530 million. In the United States, the companies will jointly commercialize duvelisib and will share equally in any potential profits. Outside the United States, AbbVie will be responsible for the commercialization of duvelisib, and Infinity is eligible to receive tiered double-digit royalties on net product sales. | |
Ablynx NV | |
In September 2013, AbbVie entered into a global collaboration agreement with Ablynx NV to develop and commercialize the anti-IL-6R Nanobody, ALX-0061, for the treatment of inflammatory diseases including rheumatoid arthritis and systemic lupus erythematosus, resulting in a charge to IPR&D of $175 million. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $665 million, as well as royalties on net sales. | |
Galapagos NV | |
In September 2013, AbbVie recorded a charge to IPR&D of $45 million as a result of entering into a global collaboration with Galapagos NV (Galapagos) to discover, develop and commercialize cystic fibrosis therapies. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $360 million, as well as royalties on net sales. | |
In February 2012, AbbVie recorded a charge to IPR&D of $150 million as a result of entering into a global collaboration with Galapagos to develop and commercialize a next-generation, oral Janus Kinase 1 (JAK1) inhibitor in Phase 2 development with the potential to treat multiple autoimmune diseases. Additional payments of approximately $1.3 billion could be required for the achievement of certain development, regulatory and commercial milestones under this agreement. | |
Alvine Pharmaceuticals, Inc. | |
In May 2013, AbbVie entered into a global collaboration with Alvine Pharmaceuticals, Inc. to develop ALV003, a novel oral treatment for patients with celiac disease. As part of the agreement, AbbVie made an initial upfront payment of $70 million, which was expensed to IPR&D in the second quarter of 2013. AbbVie could make additional payments totaling up to $275 million pursuant to this arrangement. | |
Action Pharma A/S | |
In May 2012, AbbVie recorded a charge to IPR&D of $110 million as a result of the acquisition of ABT-719 (previously referred to as AP214), a drug under development for the prevention of acute kidney injury associated with major cardiac surgery in patients at increased risk. | |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||
Goodwill and Intangible Assets | Note 7 Goodwill and Intangible Assets | |||||||||||||||||||
Goodwill | ||||||||||||||||||||
The carrying amount of goodwill was $5.9 billion and $6.3 billion at December 31, 2014 and 2013, respectively. Changes in the goodwill balance in 2014 were primarily due to foreign currency translation. Changes in the goodwill balance in 2013 were attributable to foreign currency translation and goodwill additions of $25 million related to product rights acquired during the second quarter. As of December 31, 2014, there were no accumulated goodwill impairment losses. Future impairment tests for goodwill will be performed annually in the third quarter, or earlier if indicators of impairment exist. | ||||||||||||||||||||
Intangible Assets, Net | ||||||||||||||||||||
The following table summarizes AbbVie's intangible assets: | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
(in millions) | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||
carrying | amortization | carrying | carrying | amortization | carrying | |||||||||||||||
amount | amount | amount | amount | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Definite-lived intangible assets | ||||||||||||||||||||
Developed product rights | $ | 4,546 | $ | (3,706 | ) | $ | 840 | $ | 4,744 | $ | (3,503 | ) | $ | 1,241 | ||||||
License agreements | 1,097 | (869 | ) | 228 | 994 | (792 | ) | 202 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total definite-lived intangible assets | 5,643 | (4,575 | ) | 1,068 | 5,738 | (4,295 | ) | 1,443 | ||||||||||||
Indefinite-lived research and development | 445 | — | 445 | 447 | — | 447 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total intangible assets | $ | 6,088 | $ | (4,575 | ) | $ | 1,513 | $ | 6,185 | $ | (4,295 | ) | $ | 1,890 | ||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Intangible assets with finite useful lives are amortized over their estimated useful lives, which range between 3 to 16 years with an average of 13 years and 10 years for developed product rights and license agreements, respectively. Additions in 2014 are primarily related to the acquisition of $80 million of amortizable intangible assets under license agreements for on-market product rights in the United States with an average amortization period of 10 years. | ||||||||||||||||||||
Amortization expense for 2014, 2013 and 2012 was $403 million, $509 million and $625 million, respectively, and is included in cost of products sold in the consolidated statements of earnings. At December 31, 2014, the anticipated annual amortization expense for intangible assets recorded as of December 31, 2014 was $247 million in 2015, $164 million in 2016, $152 million in 2017, $145 million in 2018 and $107 million in 2019. In the third quarter of 2014, an impairment charge of $37 million was recorded related to certain on-market product rights in Japan due to increased generic competition. The charge was based on a discounted cash flow analysis and is included in cost of products sold. | ||||||||||||||||||||
The indefinite-lived intangible assets as of December 31, 2013 relate to IPR&D acquired in a business combination. In 2012, AbbVie recorded an impairment charge of $13 million for certain projects under development. The charge was based on a discounted cash flow analysis and was included in R&D expense. In 2014, no material impairment charges were recorded related to indefinite-lived intangible assets. | ||||||||||||||||||||
Restructuring_Plans
Restructuring Plans | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Restructuring Plans | |||||
Restructuring Plans | Note 8 Restructuring Plans | ||||
In 2014 and prior years, AbbVie management approved plans to realign its worldwide manufacturing operations and selected domestic and international commercial and R&D operations in order to reduce costs in conjunction with the loss and expected loss of exclusivity of certain products. Restructuring charges recorded in 2014 were $23 million and were primarily recorded in cost of products sold in the consolidated statements of earnings with the remainder recorded in SG&A. Included in the charges were cash costs of $16 million which primarily related to employee severance and contractual obligations. | |||||
In 2013, AbbVie management approved plans to restructure certain commercial operations in conjunction with the loss and expected loss of exclusivity of certain products. Restructuring charges recorded in 2013 were $83 million and were primarily recorded in SG&A and cost of products sold in the consolidated statements of earnings with the remainder recorded in R&D. Included in the charges were cash costs of $76 million which mainly related to employee severance and contractual obligations. | |||||
In 2012, AbbVie management approved plans to realign its worldwide manufacturing operations and selected domestic and international commercial and R&D operations in order to reduce costs. In 2012, AbbVie incurred restructuring charges of approximately $191 million for employee severance and contractual obligations, primarily related to the exit from an R&D facility with $183 million recorded within R&D and $8 million within SG&A expenses in the consolidated statements of earnings. | |||||
The following summarizes the cash activity in the restructuring reserve for the years ended December 31, 2014 and 2013: | |||||
(in millions) | |||||
| | | | | |
Accrued balance at December 31, 2011 | $ | 149 | |||
2012 restructuring charges | 191 | ||||
Payments and other adjustments | (107 | ) | |||
| | | | | |
Accrued balance at December 31, 2012 | 233 | ||||
2013 restructuring charges | 76 | ||||
Payments and other adjustments | (118 | ) | |||
| | | | | |
Accrued balance at December 31, 2013 | 191 | ||||
2014 restructuring charges | 16 | ||||
Payments and other adjustments | (85 | ) | |||
| | | | | |
Accrued balance at December 31, 2014 | $ | 122 | |||
| | | | | |
| | | | | |
Payments and other adjustments for 2013 included a $23 million reversal of a previously recorded restructuring reserve due to the company's re-evaluation of a prior year decision to exit a manufacturing facility. In 2012, AbbVie recorded additional restructuring charges of $69 million, primarily for accelerated depreciation. | |||||
Debt_Credit_Facilities_and_Com
Debt, Credit Facilities, and Commitments and Contingencies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||||||||||||
Debt, Credit Facilities, and Commitments and Contingencies | Note 9 Debt, Credit Facilities, and Commitments and Contingencies | |||||||||||||
The following is a summary of long-term debt as of December 31, 2014 and 2013: | ||||||||||||||
(in millions) | Effective | 2014 | Effective | 2013 | ||||||||||
interest rate | interest rate | |||||||||||||
in 2014(a) | in 2013(a) | |||||||||||||
| | | | | | | | | | | | | | |
Floating rate notes due 2015 | 1.09 | % | $ | 500 | 1.14 | % | $ | 500 | ||||||
1.2% notes due 2015 | 1.31 | % | 3,500 | 1.31 | % | 3,500 | ||||||||
1.75% notes due 2017 | 1.86 | % | 4,000 | 1.86 | % | 4,000 | ||||||||
2.0% notes due 2018 | 2.15 | % | 1,000 | 2.15 | % | 1,000 | ||||||||
2.9% notes due 2022 | 2.97 | % | 3,100 | 2.97 | % | 3,100 | ||||||||
4.4% notes due 2042 | 4.46 | % | 2,600 | 4.46 | % | 2,600 | ||||||||
Other | — | 115 | — | 98 | ||||||||||
Fair value hedges | — | (180 | ) | — | (432 | ) | ||||||||
Unamortized bond discounts | — | (49 | ) | — | (56 | ) | ||||||||
| | | | | | | | | | | | | | |
Total long-term debt and lease obligations | 14,586 | 14,310 | ||||||||||||
Current portion | 4,021 | 18 | ||||||||||||
| | | | | | | | | | | | | | |
Noncurrent portion | $ | 10,565 | $ | 14,292 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(a) | Excludes the effect of any related interest rate swaps. | |||||||||||||
In November 2012, AbbVie issued $14.7 billion aggregate principal amount of senior notes. Approximately $3.0 billion of these senior notes were issued to Abbott as partial consideration for the transfer of assets from Abbott to AbbVie. AbbVie used part of the net proceeds from the sale of senior notes (other than the senior notes issued to Abbott) to finance the payment made in November 2012 of a $10.2 billion distribution to Abbott, as provided by the terms of the separation agreement. The debt was guaranteed by Abbott until AbbVie separated from Abbott on January 1, 2013. | ||||||||||||||
AbbVie may redeem all of the senior notes of each series, other than the floating notes due in 2015, at any time, and some of the senior notes of each series, other than the floating notes due in 2015, from time to time, at a redemption price equal to the principal amount of the senior notes redeemed plus a make-whole premium. AbbVie may not redeem the floating notes due in 2015 prior to maturity. At December 31, 2014, the company was in compliance with its senior note covenants. | ||||||||||||||
Short-Term Borrowings | ||||||||||||||
At December 31, 2014 and 2013, short-term borrowings included $416 million and $400 million, respectively, of commercial paper borrowings. The weighted-average interest rate on short-term borrowings was 0.2% and 0.2% for 2014 and 2013, respectively. | ||||||||||||||
Prior to October 2014, AbbVie had a $2.0 billion unsecured five-year revolving credit facility agreement. In October 2014, AbbVie replaced its existing revolving credit facility with the $3.0 billion five-year revolving credit facility which also supports commercial paper borrowings. At December 31, 2014, AbbVie was in compliance with the financial covenants. No borrowings were outstanding under these facilities at December 31, 2014 and December 31, 2013. | ||||||||||||||
Maturities of Long-Term Debt and Capital Lease Obligations | ||||||||||||||
The following table summarizes AbbVie's future minimum lease payments under non-cancelable operating leases, debt maturities and future minimum lease payments for capital lease obligations as of December 31, 2014: | ||||||||||||||
as of and for the years ended December 31 (in millions) | Operating | Debt maturities | ||||||||||||
leases | and capital leases | |||||||||||||
| | | | | | | | |||||||
2015 | $ | 114 | $ | 4,021 | ||||||||||
2016 | 103 | 19 | ||||||||||||
2017 | 92 | 4,018 | ||||||||||||
2018 | 81 | 1,014 | ||||||||||||
2019 | 74 | 6 | ||||||||||||
Thereafter | 98 | 5,737 | ||||||||||||
| | | | | | | | |||||||
Total obligations and commitments | 562 | 14,815 | ||||||||||||
Fair value hedges and unamortized bond discounts | n/a | (229 | ) | |||||||||||
| | | | | | | | |||||||
Total debt and lease obligations | $ | 562 | $ | 14,586 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Lease expense was $115 million in 2014 and $107 million in 2013 and was not material for 2012. As part of the separation, AbbVie entered into agreements to lease certain facilities, including office, laboratory, and factory and warehouse space, under principally non-cancelable operating leases with Abbott. AbbVie's operating leases generally include renewal options and provide for the company to pay taxes, maintenance, insurance and other operating costs of the leased property. Capital lease obligations relate to automobiles and certain facilities. As of December 31, 2014, annual future minimum lease payments for capital lease obligations are not material. | ||||||||||||||
Debt maturities and capital leases in 2015 include the $500 million floating notes due in 2015 and maturities of $3.5 billion of 1.2% senior notes. | ||||||||||||||
Contingencies and Guarantees | ||||||||||||||
In connection with the separation, AbbVie has indemnified Abbott for all liabilities resulting from the operation of AbbVie's business other than income tax liabilities with respect to periods prior to the distribution date and other liabilities as agreed to by AbbVie and Abbott. AbbVie has no material exposures to off-balance sheet arrangements, no special-purpose entities and no activities that included non-exchange-traded contracts accounted for at fair value. In the ordinary course of business, AbbVie has periodically entered into third-party agreements, such as the assignment of product rights, which have resulted in AbbVie becoming secondarily liable for obligations for which AbbVie had previously been primarily liable. Based upon past experience, the likelihood of payments under these agreements is remote. AbbVie periodically acquires a business or product rights in which AbbVie agrees to pay contingent consideration based on attaining certain thresholds or based on the occurrence of certain events. | ||||||||||||||
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measures | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Financial Instruments and Fair Value Measures | |||||||||||||||||||||
Financial Instruments and Fair Value Measures | Note 10 Financial Instruments and Fair Value Measures | ||||||||||||||||||||
Risk Management Policy | |||||||||||||||||||||
The company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. The company's hedging policy attempts to manage these risks to an acceptable level based on the company's judgment of the appropriate trade-off between risk, opportunity and costs. The company uses derivative instruments to reduce its exposure to foreign currency exchange rates. The company is also exposed to the risk that its earnings and cash flows could be adversely impacted by fluctuations in interest rates. The company periodically enters into interest rate swaps, based on judgment, to manage interest costs in which the company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. Derivative instruments are not used for trading purposes or to manage exposure to changes in interest rates for investment securities, and none of the company's outstanding derivative instruments contain credit risk related contingent features; collateral is generally not required. | |||||||||||||||||||||
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 $1.4 billion and $1.5 billion at December 31, 2014 and December 31, 2013, respectively, are designated as cash flow hedges and are recorded at fair value. Accumulated gains and losses as of December 31, 2014 will be included in cost of products sold at the time the products are sold, generally not exceeding twelve months. | |||||||||||||||||||||
The company enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. The contracts are marked-to-market, and resulting gains or losses are reflected in income and are generally offset by losses or gains on the foreign currency exposure being managed. At December 31, 2014 and December 31, 2013, AbbVie held notional amounts of $6.8 billion and $5.3 billion, respectively, of such foreign currency forward exchange contracts. | |||||||||||||||||||||
In 2014, the company entered into undesignated forward contracts with a total notional amount of $16.9 billion to hedge anticipated foreign currency cash outflows associated with the terminated proposed combination with Shire. A large portion of these contracts original maturity is in the first quarter of 2015 but were net settled in the fourth quarter of 2014. In 2014, the company realized $490 million in net foreign exchange loss associated with the Shire-related forward contracts. | |||||||||||||||||||||
AbbVie is a party to interest rate hedge contracts, designated as fair value hedges, totaling $8.0 billion at both December 31, 2014 and December 31, 2013. The effect of the hedge is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie recorded the contracts at fair value and adjusted the carrying amount of the fixed-rate debt by an offsetting amount. | |||||||||||||||||||||
The following table summarizes the amounts and location of AbbVie's derivative instruments as of December 31. | |||||||||||||||||||||
Fair value—Derivatives in asset position | Fair value—Derivatives in liability | ||||||||||||||||||||
position | |||||||||||||||||||||
(in millions) | 2014 | 2013 | Balance sheet caption | 2014 | 2013 | Balance sheet caption | |||||||||||||||
| | | | | | | | | | | | | | | | | |||||
Interest rate swaps designated as fair value hedges | $ | — | $ | — | n/a | $ | 180 | $ | 432 | Long-term liabilities | |||||||||||
Foreign currency forward exchange contracts— | |||||||||||||||||||||
Hedging instruments | 141 | — | Prepaid expenses and other | — | 61 | Accounts payable and accrued liabilities | |||||||||||||||
Others not designated as hedges | 70 | 17 | Prepaid expenses and other | 63 | 12 | Accounts payable and accrued liabilities | |||||||||||||||
| | | | | | | | | | | | | | | | | |||||
Total | $ | 211 | $ | 17 | $ | 243 | $ | 505 | |||||||||||||
| | | | | | | | | | | | | | | | | |||||
While certain derivatives are subject to netting arrangements with the company's counterparties, the company does not offset derivative assets and liabilities within the consolidated balance sheets. | |||||||||||||||||||||
The following table summarizes the activity for derivative instruments and the amounts and location of income (expense) and gain (loss) reclassified into net earnings for the years ended December 31, 2014, 2013 and 2012, respectively. The amount of hedge ineffectiveness was not significant for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||
Gain (loss) | (Expense) income | ||||||||||||||||||||
recognized | and (loss) gain | ||||||||||||||||||||
in other | reclassified | ||||||||||||||||||||
comprehensive | into income | ||||||||||||||||||||
(loss) income | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | Income statement caption | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
Foreign currency forward exchange contracts— | |||||||||||||||||||||
Designated as cash flow hedges | $ | 193 | $ | (77 | ) | $ | (11 | ) | $ | (79 | ) | $ | — | $ | 24 | Cost of products sold | |||||
Not designated as hedges | n/a | n/a | n/a | (523 | ) | 81 | (23 | ) | Net foreign exchange (loss) gain | ||||||||||||
Interest rate swaps designated as fair value hedges | n/a | n/a | n/a | 252 | (351 | ) | (81 | ) | Interest expense (income), net | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
The gain/(loss) related to fair value hedges is recognized in net interest expense and directly offsets the (loss)/gain on the underlying hedged item, the fixed-rate debt, resulting in no net impact to net interest expense for years ended December 31, 2014 and 2013. | |||||||||||||||||||||
Fair Value Measures | |||||||||||||||||||||
The fair value hierarchy under the accounting standard for fair value measurements 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. | ||||||||||||||||||||
The following table summarizes the bases used to measure certain assets and liabilities that are carried at fair value on a recurring basis in the consolidated balance sheet as of December 31, 2014: | |||||||||||||||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Balance at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2014 | markets for | observable | Inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Cash and equivalents | $ | 8,348 | $ | 1,214 | $ | 7,134 | $ | — | |||||||||||||
Time deposits | 9 | — | 9 | — | |||||||||||||||||
Equity securities | 13 | 13 | — | — | |||||||||||||||||
Foreign currency contracts | 211 | — | 211 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 8,581 | $ | 1,227 | $ | 7,354 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Interest rate hedges | $ | 180 | $ | — | $ | 180 | $ | — | |||||||||||||
Foreign currency contracts | 63 | — | 63 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 243 | $ | — | $ | 243 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
The following table summarizes the bases used to measure certain assets and liabilities that are carried at fair value on a recurring basis in the consolidated balance sheet as of December 31, 2013: | |||||||||||||||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Balance at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2013 | markets for | observable | Inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Cash and equivalents | $ | 9,595 | $ | 684 | $ | 8,911 | $ | — | |||||||||||||
Time deposits | 300 | — | 300 | — | |||||||||||||||||
Equity securities | 10 | 10 | — | — | |||||||||||||||||
Foreign currency contracts | 17 | — | 17 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 9,922 | $ | 694 | $ | 9,228 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Interest rate hedges | $ | 432 | $ | — | $ | 432 | $ | — | |||||||||||||
Foreign currency contracts | 73 | — | 73 | — | |||||||||||||||||
Contingent consideration | 165 | — | — | 165 | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 670 | $ | — | $ | 505 | $ | 165 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
The fair values for time deposits included in cash and equivalents and short-term investments are determined based on a discounted cash flow analysis reflecting quoted market rates for the same or similar instruments. The fair values of time deposits approximate their amortized cost due to the short maturities of these instruments. Available-for-sale equity securities consists of investments for which the fair value is determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company are valued using publicized spot curves for interest rate hedges and publicized forward curves for foreign currency contracts. The contingent consideration is valued using a discounted cash flow technique that reflects management's expectations about probability of payment. | |||||||||||||||||||||
Cumulative net unrealized holding gains on available-for-sale equity securities totaled $3 million and $2 million at December 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||
There have been no transfers of assets or liabilities between the fair value measurement levels. The following table is a reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and investments: | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
| | | | | |||||||||||||||||
Fair value as of December 31, 2012 | $ | 251 | |||||||||||||||||||
Payments | (131 | ) | |||||||||||||||||||
Additions | 28 | ||||||||||||||||||||
Change in fair value recognized in earnings | 17 | ||||||||||||||||||||
| | | | | |||||||||||||||||
Fair value as of December 31, 2013 | 165 | ||||||||||||||||||||
Payments | (164 | ) | |||||||||||||||||||
Other | — | ||||||||||||||||||||
Change in fair value recognized in earnings | (1 | ) | |||||||||||||||||||
| | | | | |||||||||||||||||
Fair value as of December 31, 2014 | $ | — | |||||||||||||||||||
| | | | | |||||||||||||||||
| | | | | |||||||||||||||||
The contingent payments were primarily in connection with the acquisition of Solvay's U.S. pharmaceuticals business in 2010. The achievement of a certain sales milestone resulted in a payment of approximately $137 million in 2014 and $131 million in 2013 for which a liability was previously established. Additions of $28 million related to the acquisition of product rights in 2013. The change in fair value recognized in earnings was recognized in net foreign exchange loss and other income, net in the consolidated statements of earnings. | |||||||||||||||||||||
In addition to the financial instruments that the company is required to recognize at fair value on the consolidated balance sheets, the company has certain financial instruments that are recognized at historical cost or some basis other than fair value. The carrying values and fair values of certain financial instruments as of December 31, 2014 and 2013 are shown in the table below: | |||||||||||||||||||||
Book values | Approximate | ||||||||||||||||||||
fair values | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Investments | $ | 95 | $ | 108 | $ | 145 | $ | 129 | |||||||||||||
Liabilities | |||||||||||||||||||||
Short-term borrowings | 425 | 413 | 425 | 413 | |||||||||||||||||
Current portion of long-term debt and lease obligations | 4,021 | 18 | 4,033 | 18 | |||||||||||||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,745 | 14,724 | 10,830 | 14,493 | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of December 31, 2014. | |||||||||||||||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Fair value at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2014 | markets for | observable | inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Investments | $ | 145 | $ | 68 | $ | 13 | $ | 64 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 145 | $ | 68 | $ | 13 | $ | 64 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Short-term borrowings | $ | 425 | $ | — | $ | 425 | $ | — | |||||||||||||
Current portion of long-term debt and lease obligations | 4,033 | 4,012 | 21 | — | |||||||||||||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,830 | 10,737 | 93 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 15,288 | $ | 14,749 | $ | 539 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of December 31, 2013. | |||||||||||||||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Fair value at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2013 | markets for | observable | inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Investments | $ | 129 | $ | 39 | $ | 30 | $ | 60 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 129 | $ | 39 | $ | 30 | $ | 60 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Short-term borrowings | $ | 413 | $ | — | $ | 413 | $ | — | |||||||||||||
Current portion of long-term debt and lease obligations | 18 | — | 18 | — | |||||||||||||||||
Long-term debt and lease obligations, excluding fair value hedges | 14,493 | 14,413 | 80 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 14,924 | $ | 14,413 | $ | 511 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Investments consist of cost method investments and held-to-maturity debt securities. Cost method investments include certain investments for which the fair value is determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. To determine the fair value of other cost method investments, the company takes into consideration recent transactions, as well as the financial information of the investee, which represents a Level 3 basis of fair value measurement. The fair value of held-to-maturity debt securities was estimated based upon the quoted market prices for the same or similar debt instruments. The fair values of short-term and current borrowings approximate the carrying values due to the short maturities of these instruments. | |||||||||||||||||||||
The fair value of long-term debt, excluding fair value hedges, was determined by using the published market price for the debt instruments, without consideration of transaction costs, which represents a Level 1 basis of fair value measurement. The counterparties to financial instruments consist of select major international financial institutions. | |||||||||||||||||||||
Concentrations of Risk | |||||||||||||||||||||
The company invests excess cash in time deposits, money market funds and U.S. Treasury securities and diversifies the concentration of cash among different financial institutions. The company monitors concentrations of credit risk associated with deposits with financial institutions. Credit exposure limits have been established to limit a concentration with any single issuer or institution. | |||||||||||||||||||||
At December 31, 2014, AbbVie had approximately $240 million of net monetary assets denominated in the Venezuelan bolivar (converted at a rate of 6.3 VEF/USD) in its Venezuelan entity, which had net sales of $240 million in 2014. If AbbVie’s net monetary assets denominate in the Venezuelan bolivar had been converted at a rate of 12 VEF/USD at December 31, 2014, it would have resulted in a devaluation loss of $ 114 million in 2014.The company cannot predict whether there will be further devaluations of the Venezuelan currency or whether the use of the official rate of 6.3 will continue to be supported by evolving facts and circumstances. If circumstances change such that the company concludes it would be appropriate to use a different rate, or if a devaluation of the official rate occurs, it could result in a significant change to AbbVie's results of operations. | |||||||||||||||||||||
Three U.S. wholesalers accounted for 49 percent and 38 percent of total net accounts receivable as of December 31, 2014 and December 31, 2013, respectively, and substantially all of AbbVie's sales in the United States are to these three wholesalers. In addition, net governmental receivables outstanding in Greece, Portugal, Italy and Spain totaled $446 million at December 31, 2014 and $781 million at December 31, 2013. | |||||||||||||||||||||
HUMIRA is AbbVie's single largest product and accounted for approximately 63 percent, 57 percent and 50 percent of AbbVie's total net sales in 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
PostEmployment_Benefits
Post-Employment Benefits | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Post-Employment Benefits | ||||||||||||||
Post-Employment Benefits | Note 11 Post-Employment Benefits | |||||||||||||
AbbVie sponsors various pension and other post-employment benefit plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. In addition, AbbVie provides medical benefits, primarily to eligible U.S. retirees, through other post-retirement benefit plans. Net obligations for these plans have been reflected in the consolidated balance sheets as of December 31, 2014 and 2013. | ||||||||||||||
Abbott Sponsored Plans | ||||||||||||||
Prior to separation, AbbVie employees participated in certain U.S. and international defined benefit pension and other post-employment benefit (OPEB) plans sponsored by Abbott. These plans included participants of Abbott's other businesses and were accounted for as multiemployer benefit plans in AbbVie's combined financial statements as of and for the year ended December 31, 2012. As a result, no asset or liability was recorded by AbbVie in the historical combined balance sheets through December 31, 2012 to recognize the funded status of these plans. Effective January 1, 2013, in connection with the separation of AbbVie from Abbott, these plans were separated and AbbVie assumed net benefit plan obligations that were previously provided by Abbott. For Abbott-sponsored defined benefit and post-employment benefit plans, AbbVie recorded expenses of $200 million in 2012. Abbott made voluntary contributions to its defined benefit pension plans that AbbVie accounted for as multiemployer benefit plans totaling $310 million in 2012. | ||||||||||||||
AbbVie Sponsored Plans | ||||||||||||||
Prior to the separation, AbbVie employees participated in the Abbott Laboratories Annuity Retirement Plan, which was Abbott's principal domestic defined benefit pension plan. In connection with the separation, AbbVie established the AbbVie Pension Plan, which is AbbVie's principal domestic defined benefit pension plan, with substantially the same terms as the Abbott Laboratories Annuity Retirement Plan. AbbVie employees who were eligible to participate in the Abbott Laboratories Annuity Retirement Plan on December 31, 2012 automatically became eligible for the AbbVie Pension Plan. During the first quarter of 2013, the AbbVie Pension Plan assumed the obligations and related assets for its employees from the Abbott Laboratories Annuity Retirement Plan. AbbVie made voluntary contributions of $370 million and $145 million in 2014 and 2013, respectively, to this plan. AbbVie also made a voluntary contribution of $150 million to this plan subsequent to December 31, 2014. | ||||||||||||||
The benefit plan information in the table below pertains to the global AbbVie-sponsored defined benefit pension and other post-employment plans. | ||||||||||||||
Defined | Other | |||||||||||||
benefit plans | post-employment | |||||||||||||
plans | ||||||||||||||
as of and for the years ended December 31 (in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
| | | | | | | | | | | | | | |
Projected benefit obligations | ||||||||||||||
Beginning of period | $ | 4,484 | $ | 1,669 | $ | 403 | $ | 231 | ||||||
Service cost | 173 | 184 | 22 | 23 | ||||||||||
Interest cost | 217 | 196 | 22 | 19 | ||||||||||
Employee contributions | 1 | 1 | — | — | ||||||||||
Plan amendments | 1 | (1 | ) | (13 | ) | — | ||||||||
Assumption of plan liabilities | — | 3,009 | — | 209 | ||||||||||
Removal of plans | — | — | — | (12 | ) | |||||||||
Actuarial (gain) loss | 1,108 | (455 | ) | 111 | (55 | ) | ||||||||
Benefits paid | (163 | ) | (146 | ) | (8 | ) | (12 | ) | ||||||
Other, primarily foreign currency translation loss | (140 | ) | 27 | 1 | — | |||||||||
| | | | | | | | | | | | | | |
End of period | $ | 5,681 | $ | 4,484 | $ | 538 | $ | 403 | ||||||
| | | | | | | | | | | | | | |
Fair value of plan assets | ||||||||||||||
Beginning of period | $ | 3,666 | $ | 898 | $ | — | $ | — | ||||||
Actual return on plan assets | 282 | 491 | — | — | ||||||||||
Company contributions | 430 | 198 | 8 | 12 | ||||||||||
Employee contributions | 1 | 1 | — | — | ||||||||||
Assumption of plan assets | — | 2,221 | — | — | ||||||||||
Benefits paid | (163 | ) | (146 | ) | (8 | ) | (12 | ) | ||||||
Other, primarily foreign currency translation gain | (43 | ) | 3 | — | — | |||||||||
| | | | | | | | | | | | | | |
End of period | $ | 4,173 | $ | 3,666 | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | |
Funded status at December 31 | $ | (1,508 | ) | $ | (818 | ) | $ | (538 | ) | $ | (403 | ) | ||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Amounts recognized in consolidated balance sheets | ||||||||||||||
Other assets | $ | 210 | $ | 442 | $ | — | $ | — | ||||||
Current liabilities | (26 | ) | (27 | ) | (10 | ) | (8 | ) | ||||||
Long-term liabilities | (1,692 | ) | (1,233 | ) | (528 | ) | (395 | ) | ||||||
| | | | | | | | | | | | | | |
Net liability at December 31 | $ | (1,508 | ) | $ | (818 | ) | $ | (538 | ) | $ | (403 | ) | ||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Actuarial losses, net | $ | 2,216 | $ | 1,194 | $ | 181 | $ | 74 | ||||||
Prior service cost | 19 | 22 | (53 | ) | (47 | ) | ||||||||
| | | | | | | | | | | | | | |
AOCI at December 31 | $ | 2,235 | $ | 1,216 | $ | 128 | $ | 27 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The projected benefit obligations (PBO) in the table above included $1.4 billion and $1.2 billion at December 31, 2014 and 2013, respectively, related to international defined benefit pension plans, a number of which generally are not funded in accordance with local regulations. Benefit payments under those plans are funded from company assets. The funded status at December 31, 2014 reflects that AbbVie considered the release of the new mortality tables and projection scales by the Society of Actuaries as an improvement of the estimate of future mortality and opted to change to the new tables in 2014. | ||||||||||||||
For plans reflected in the table above, the accumulated benefit obligations (ABO) were $5.0 billion and $3.9 billion at December 31, 2014 and 2013, respectively. For those plans reflected in the table above in which the ABO exceeded plan assets at December 31, 2014, the ABO, PBO and aggregate plan assets were $2.9 billion, $3.5 billion and $1.8 billion, respectively. | ||||||||||||||
Amounts Recognized in AOCI and OCI | ||||||||||||||
The defined benefit pension and other post-employment plans' actuarial gains or losses and prior service costs or credits not yet recognized in net periodic benefit cost are recognized on a net-of-tax basis in AOCI and will be amortized to net periodic benefit cost in the future. The following is a summary of the pretax gains and losses included in OCI. | ||||||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Defined benefit plans | ||||||||||||||
Actuarial (gain) loss | $ | 1,127 | $ | (715 | ) | $ | 98 | |||||||
Prior service cost | 1 | 15 | 9 | |||||||||||
Amortization of actuarial losses and prior service costs | (68 | ) | (114 | ) | (7 | ) | ||||||||
Foreign exchange loss | (41 | ) | 2 | 5 | ||||||||||
| | | | | | | | | | | ||||
Total pretax (gain) loss recognized in OCI | $ | 1,019 | $ | (812 | ) | $ | 105 | |||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Other post-employment plans | ||||||||||||||
Actuarial (gain) loss | $ | 111 | $ | (42 | ) | $ | 69 | |||||||
Prior service cost | (13 | ) | (53 | ) | — | |||||||||
Amortization of actuarial losses and prior service costs | 3 | — | — | |||||||||||
| | | | | | | | | | | ||||
Total pretax (gain) loss recognized in OCI | $ | 101 | $ | (95 | ) | $ | 69 | |||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
The pretax amount of actuarial (gain) loss and prior service cost included in AOCI at December 31, 2014 that is expected to be recognized in the net periodic benefit cost in 2015 is $114 million for defined benefit plans and $2 million for other post-employment plans. | ||||||||||||||
Net Periodic Benefit Cost | ||||||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Defined benefit plans | ||||||||||||||
Service cost | $ | 173 | $ | 184 | $ | 21 | ||||||||
Interest cost | 217 | 196 | 38 | |||||||||||
Expected return on plan assets | (302 | ) | (259 | ) | (29 | ) | ||||||||
Amortization of actuarial losses and prior service costs | 68 | 114 | 7 | |||||||||||
| | | | | | | | | | | ||||
Net periodic pension benefit cost | $ | 156 | $ | 235 | $ | 37 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Other post-employment plans | ||||||||||||||
Service cost | $ | 22 | $ | 23 | $ | — | ||||||||
Interest cost | 22 | 19 | — | |||||||||||
Amortization of actuarial gain and prior service costs | (2 | ) | (1 | ) | — | |||||||||
| | | | | | | | | | | ||||
Net periodic OPEB cost | $ | 42 | $ | 41 | $ | — | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date | ||||||||||||||
2014 | 2013 | |||||||||||||
| | | | | | | | |||||||
Defined benefit plans | ||||||||||||||
Discount rate | 3.9 | % | 4.9 | % | ||||||||||
Rate of compensation increases | 4.4 | % | 5.0 | % | ||||||||||
Other post-employment plans | ||||||||||||||
Discount rate | 4.5 | % | 5.3 | % | ||||||||||
Rate of compensation increases | — | 6.0 | % | |||||||||||
| | | | | | | | |||||||
The assumptions above, which were used in calculating the December 31, 2014 measurement date benefit obligations, will be used in the calculation of net periodic benefit cost in 2015. | ||||||||||||||
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
| | | | | | | | | | | ||||
Defined benefit plans | ||||||||||||||
Discount rate | 4.9 | % | 4.3 | % | 5.1 | % | ||||||||
Expected long-term rate of return on plan assets | 7.9 | % | 8.2 | % | 8.5 | % | ||||||||
Expected rate of change in compensation | 5.0 | % | 5.0 | % | 4.2 | % | ||||||||
Other post-employment plans | ||||||||||||||
Discount rate | 5.3 | % | 4.5 | % | N/A | |||||||||
| | | | | | | | | | | ||||
For 2014, for purposes of measuring post-retirement health care obligations as of the measurement date, the company assumed a 7.5% pre-65 (7.3% post-65) annual rate of increase in the per capita cost of covered health care benefits. The rate was assumed to decrease gradually to 4.5% in 2064 and remain at that level thereafter. For purposes of measuring post-retirement health care costs, the company assumed a 7.9% pre-65 (7.6% post-65) annual rate of increase in the per capita cost of covered health care benefits. The rate was assumed to decrease gradually to 5% for 2051 and remain at that level thereafter. | ||||||||||||||
Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. As of December 31, 2014, a 1 percentage point change in assumed health care cost trend rates would have the following effects: | ||||||||||||||
One percentage | ||||||||||||||
point | ||||||||||||||
year ended December 31, 2014 (in millions) | Increase | Decrease | ||||||||||||
| | | | | | | | |||||||
Service cost and interest cost | $ | 9 | $ | (7 | ) | |||||||||
Projected benefit obligation | 121 | (92 | ) | |||||||||||
| | | | | | | | |||||||
Defined Benefit Pension Plan Assets | ||||||||||||||
Basis of fair value measurement | ||||||||||||||
(in millions) | Balance at | Quoted prices in | Significant other | Significant | ||||||||||
December 31, | active markets for | observable | unobservable | |||||||||||
2014 | identical assets | inputs | inputs | |||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
| | | | | | | | | | | | | | |
Equities | ||||||||||||||
U.S. large cap(a) | $ | 1,314 | $ | 588 | $ | 726 | $ | — | ||||||
U.S. mid cap(b) | 267 | 67 | 200 | — | ||||||||||
International(c) | 608 | 137 | 471 | — | ||||||||||
Fixed income securities | ||||||||||||||
U.S. government securities(d) | 216 | — | 216 | — | ||||||||||
Corporate debt instruments(e) | 326 | 101 | 225 | — | ||||||||||
Government Securities International | 425 | 201 | 224 | — | ||||||||||
Other | 37 | 29 | 8 | — | ||||||||||
Absolute return funds(f) | 848 | 3 | 371 | 474 | ||||||||||
Real assets | 53 | 7 | 46 | — | ||||||||||
Other(g) | 79 | 79 | — | — | ||||||||||
| | | | | | | | | | | | | | |
Fair value of plan assets | $ | 4,173 | $ | 1,212 | $ | 2,487 | $ | 474 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basis of fair value measurement | ||||||||||||||
(in millions) | Balance at | Quoted prices in | Significant other | Significant | ||||||||||
December 31, | active markets for | observable | unobservable | |||||||||||
2013 | identical assets | inputs | inputs | |||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
| | | | | | | | | | | | | | |
Equities | ||||||||||||||
U.S. large cap(a) | $ | 1,197 | $ | 576 | $ | 621 | $ | — | ||||||
U.S. mid cap(b) | 244 | 62 | 182 | — | ||||||||||
International(c) | 614 | 225 | 389 | — | ||||||||||
Fixed income securities | ||||||||||||||
U.S. government securities(d) | 292 | 35 | 257 | — | ||||||||||
Corporate debt instruments(e) | 212 | 57 | 155 | — | ||||||||||
Government Securities International | 216 | 159 | 57 | — | ||||||||||
Other | 52 | 45 | 7 | — | ||||||||||
Absolute return funds(f) | 704 | 3 | 290 | 411 | ||||||||||
Real assets | 70 | 8 | 62 | — | ||||||||||
Other(g) | 65 | 62 | 3 | — | ||||||||||
| | | | | | | | | | | | | | |
Fair value of plan assets | $ | 3,666 | $ | 1,232 | $ | 2,023 | $ | 411 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(a) | A mix of pooled index funds and actively managed equity accounts that are benchmarked to various large cap indices. | |||||||||||||
(b) | A mix of pooled index funds and actively managed equity accounts that are benchmarked to various mid cap indices. | |||||||||||||
(c) | A mix of pooled index funds and actively managed equity accounts that are benchmarked to various non-US equity indices in both developed and emerging markets. | |||||||||||||
(d) | Securities held by actively managed accounts, pooled index funds, and mutual funds. | |||||||||||||
(e) | Securities held by actively managed accounts, pooled index funds, and mutual funds. | |||||||||||||
(f) | Funds having global mandates with the flexibility to allocate capital broadly across a wide range of asset classes and strategies, including but not limited to equities, fixed income, commodities, financial futures, currencies, and other securities, with objectives to outperform agreed upon benchmarks of specific return and volatility targets. | |||||||||||||
(g) | Investments in cash and cash equivalents. | |||||||||||||
Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company that are valued using significant other observable inputs are valued at the net asset value (NAV) provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry-recognized vendors. Absolute return funds and commodities are valued at the NAV provided by the fund administrator. | ||||||||||||||
The following table summarizes the change in the value of plan assets that are measured using significant unobservable inputs (Level 3): | ||||||||||||||
(in millions) | 2014 | 2013 | ||||||||||||
| | | | | | | | |||||||
Balance as of January 1 | $ | 411 | $ | 33 | ||||||||||
Actual return on plan assets on hand at year end | 21 | 4 | ||||||||||||
Assumption of level 3 assets | — | 372 | ||||||||||||
Purchases, sales and settlements, net | 42 | 2 | ||||||||||||
| | | | | | | | |||||||
Balance as of December 31 | $ | 474 | $ | 411 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return, balancing higher return, more volatile equity securities, and lower return, less volatile fixed income securities. Investment allocations are established for each plan and are generally made across a range of markets, industry sectors, capitalization sizes, and in the case of fixed income securities, maturities and credit quality. The target investment allocations for the AbbVie Pension Plan is 50% in equity securities, 20% in fixed income securities and 30% in asset allocation strategies and other holdings. There are no known significant concentrations of risk in the plan assets of the AbbVie Pension Plan or any other plans' assets. | ||||||||||||||
The plans' expected return on assets, as shown above, is based on management's expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, as well as current economic and capital market conditions. | ||||||||||||||
Expected Pension and Other Post-Employment Payments | ||||||||||||||
(in millions) | Defined | Other | ||||||||||||
benefit plans | post-employment | |||||||||||||
plans | ||||||||||||||
| | | | | | | | |||||||
2015 | $ | 161 | $ | 10 | ||||||||||
2016 | 170 | 12 | ||||||||||||
2017 | 180 | 14 | ||||||||||||
2018 | 192 | 15 | ||||||||||||
2019 | 204 | 17 | ||||||||||||
2020 to 2024 | 1,239 | 115 | ||||||||||||
| | | | | | | | |||||||
The above table reflects total benefit payments expected to be paid to participants, which includes payments funded from company assets as well as paid from the plans. | ||||||||||||||
Other | ||||||||||||||
Prior to the separation, AbbVie employees also participated in the Abbott Laboratories Stock Retirement Plan, which was Abbott's principal defined contribution plan. AbbVie recorded expense of $67 million in 2012 related to this plan. In connection with the separation, AbbVie established the AbbVie Savings Plan, which is AbbVie's principal defined contribution plan, with substantially the same terms as the Abbott Laboratories Stock Retirement Plan. AbbVie employees who were eligible to participate in the Abbott Laboratories Stock Retirement Plan on December 31, 2012 automatically became eligible for the AbbVie Savings Plan. AbbVie recorded expense of $67 million in 2014 and $62 million in 2013 related to this plan. | ||||||||||||||
AbbVie provides certain other post-employment benefits, primarily salary continuation plans, to qualifying employees and accrues for the related cost over the service lives of the employees. | ||||||||||||||
Equity
Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity | |||||||||||||||||
Equity | Note 12 Equity | ||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
Stock-based compensation expense was $241 million, $212 million and $187 million in 2014, 2013 and 2012, respectively, and is principally classified in SG&A for all periods presented with the remainder classified in R&D and cost of products sold. The related tax benefit recognized was $73 million, $68 million and $56 million in 2014, 2013 and 2012, respectively. Stock-based compensation expense for 2012 was allocated to AbbVie based on the portion of Abbott's incentive stock program in which AbbVie employees participated. | |||||||||||||||||
Compensation expense for stock-based awards is measured based on the fair value of the awards, as of the date the stock-based awards are granted and adjusted to the estimated number of awards that are expected to vest. Forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. Compensation cost for stock-based awards is amortized over their service period, which could be shorter than the vesting period if an employee is retirement eligible, with a charge to compensation expense. For stock-based awards granted to retirement-eligible employees, compensation expense is recognized immediately at the grant date because the employee is able to retain the award without continuing to provide service. | |||||||||||||||||
Prior to separation, AbbVie employees participated in Abbott's incentive stock program. The AbbVie 2013 Incentive Stock Program, adopted at the time of separation, facilitated the assumption of certain awards granted under Abbott's incentive stock program and authorizes the post-separation grant of several different forms of benefits, including nonqualified stock options, RSAs, RSUs and performance-based RSAs and RSUs. Under the AbbVie 2013 Incentive Stock Program, 100 million shares of common stock were reserved for issuance with respect to post-separation awards for participants. | |||||||||||||||||
In connection with the separation, outstanding Abbott employee stock options, RSAs and RSUs previously issued under Abbott's incentive stock program were adjusted and converted into new Abbott and AbbVie stock-based awards using a formula designed to preserve the intrinsic value and fair value of the awards immediately prior to the separation. Upon the separation on January 1, 2013, holders of Abbott stock options, RSAs and RSUs generally received one AbbVie stock-based award for each Abbott stock-based award outstanding. These adjusted awards retained the vesting schedule and expiration date of the original awards. No AbbVie awards have been granted to Abbott employees other than in connection with the separation. | |||||||||||||||||
In 2014 and 2013, realized excess tax benefits associated with stock-based compensation totaled $56 million and $38 million, respectively, and were presented in the consolidated statements of cash flows as an outflow within the operating section and an inflow within the financing section. | |||||||||||||||||
Stock Options | |||||||||||||||||
The exercise price for options granted is at least equal to 100 percent of the market value on the date of grant. Stock options typically have a contractual term of 10 years and generally vest in one-third increments over a three-year period. | |||||||||||||||||
The fair value of stock options is determined using the Black-Scholes model. The weighted-average grant-date fair values of the stock options granted were $9.83, $6.87, and $6.80 for 2014, 2013 and 2012, respectively. Stock-based compensation expense attributable to options during each of the years presented was not material. | |||||||||||||||||
The following table summarizes AbbVie stock option activity for both AbbVie and Abbott employees for the year ended December 31, 2014: | |||||||||||||||||
(options in thousands, aggregate intrinsic value in millions) | Options | Weighted- | Weighted- | Aggregate | |||||||||||||
average | Average | intrinsic value | |||||||||||||||
exercise price | remaining | ||||||||||||||||
life (in years) | |||||||||||||||||
| | | | | | | | | | | | | | ||||
Outstanding at December 31, 2013 | 35,994 | $ | 27.48 | 3.6 | $ | 912 | |||||||||||
Granted | 1,134 | 51.53 | |||||||||||||||
Exercised | (8,765 | ) | 27.18 | ||||||||||||||
Lapsed | (83 | ) | 25.97 | ||||||||||||||
| | | | | | | | | | | | | | ||||
Outstanding at December 31, 2014 | 28,280 | $ | 28.53 | 3.3 | $ | 1,044 | |||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Exercisable at December 31, 2014 | 25,497 | $ | 27.2 | 2.8 | $ | 975 | |||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
The aggregate intrinsic value in the table above represents the difference between the exercise price and the company's closing stock price on the last day of trading for the year ended December 31, 2014. The total intrinsic value of options exercised in 2014 and 2013 was $253 million and $229 million, respectively. For options issued under Abbott's incentive stock programs to AbbVie employees prior to the separation, the total intrinsic value of options exercises in 2012 was $170 million. The total fair value of options vested during 2014 was $8 million. | |||||||||||||||||
The excess tax benefit realized from option exercises totaled $46 million for 2014. As of December 31, 2014, $4 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years. | |||||||||||||||||
RSAs & RSUs | |||||||||||||||||
RSAs generally vest over three or five years. For RSAs that vest over five years, no more than one-third of the award vests in any one year. RSUs vest over three years and, upon vesting, the recipient receives one share of common stock for each vested RSU. In addition, AbbVie grants selected executives and other key employees performance-based RSAs and RSUs with vesting contingent upon meeting various company-wide performance goals, including AbbVie achieving a minimum return on equity. The fair value of RSAs and RSUs (including performance-based awards) is determined based on the number of shares granted and the quoted price of the common stock on the date of grant. AbbVie assumes that the performance goals will be achieved. If such goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. | |||||||||||||||||
The following table summarizes AbbVie RSA and RSU activity (including performance-based awards) for both AbbVie and Abbott employees for the year ended December 31, 2014: | |||||||||||||||||
(share units in thousands) | Share units | Weighted-average | |||||||||||||||
grant date fair value | |||||||||||||||||
| | | | | | | | ||||||||||
Outstanding at December 31, 2013 | 14,910 | $ | 32.07 | ||||||||||||||
Granted | 5,112 | 51.55 | |||||||||||||||
Vested | (6,638 | ) | 29.43 | ||||||||||||||
Lapsed | (569 | ) | 38.48 | ||||||||||||||
| | | | | | | | ||||||||||
Outstanding at December 31, 2014 | 12,815 | $ | 40.98 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
The fair market value of RSAs and RSUs vested in 2014 and 2013 was $338 million and $285 million, respectively. For RSAs and RSUs issued under Abbott's incentive stock programs prior to the separation, the fair market value of RSAs and RSUs vested in 2012 was $123 million. The weighted-average grant-date fair value per share of RSAs and RSUs granted in 2012 was $56.07. Such amounts have not been adjusted to reflect the separation from Abbott. | |||||||||||||||||
As of December 31, 2014, $192 million of unrecognized compensation cost related to RSAs and RSUs is expected to be recognized as expense over approximately the next two years. | |||||||||||||||||
Cash Dividends | |||||||||||||||||
On December 12, 2013, the board of directors declared a quarterly cash dividend of $0.40 per share of common stock for stockholders of record on January 15, 2014, which was paid on February 14, 2014. Additionally, the quarterly cash dividend declared by the board of directors on February 20, 2014 of $0.42 per share, which represented an increase of 5 percent over the previous quarterly rate of $0.40 per share was paid on May 15. On June 18 and September 19, 2014, the board of directors declared quarterly cash dividends of $0.42 per share which were paid on August 15 and November 17, 2014, respectively. Additionally, on October 20, 2014, the board of directors declared an increase in the company's quarterly cash dividend from $0.42 per share to $0.49 per share of common stock, for stockholders of record on January 15, 2015, which was paid on February 13, 2015. | |||||||||||||||||
Stock Repurchase Program | |||||||||||||||||
On February 15, 2013, AbbVie's board of directors authorized a $1.5 billion stock repurchase program. On October 20, 2014, AbbVie's board of directors authorized a new $5.0 billion stock repurchase program, which was effective immediately and supersedes the previous authorization, and is expected to be executed over the next several years. The stock repurchase authorization permits purchases of AbbVie shares from time to time in open market or private transactions at management's discretion depending on the company's cash flows, net debt level and market conditions. The plan has no time limit and can be discontinued at any time. | |||||||||||||||||
During 2014 and 2013, AbbVie repurchased approximately 9 million shares and 4 million shares for $550 million and $223 million, respectively, in the open market. Shares repurchased under this program are recorded at acquisition cost, including related expenses, and are available for general corporate purposes. AbbVie's remaining share repurchase authorization was $4.7 billion as of December 31, 2014. | |||||||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||
The following table summarizes the changes in balances of each component of AOCI, net of tax for the years ended December 31, 2013 and 2014: | |||||||||||||||||
(in millions) (brackets denote losses) | Foreign | Pension | Unrealized | Hedging | Total | ||||||||||||
currency | and post- | gains | activities | ||||||||||||||
translation | employment | (losses) on | |||||||||||||||
adjustments | benefits | marketable | |||||||||||||||
equity | |||||||||||||||||
securities | |||||||||||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2011 | $ | 8 | $ | (65 | ) | $ | 26 | $ | 6 | $ | (25 | ) | |||||
Other comprehensive income before reclassifications | 173 | (157 | ) | (25 | ) | (9 | ) | $ | (18 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | — | 7 | — | (18 | ) | $ | (11 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Net current-period other comprehensive income | 173 | (150 | ) | (25 | ) | (27 | ) | $ | (29 | ) | |||||||
| | | | | | | | | | | | | | | | | |
Separation-related adjustments | — | (296 | ) | — | — | $ | (296 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2012 | $ | 181 | $ | (511 | ) | $ | 1 | $ | (21 | ) | $ | (350 | ) | ||||
| | | | | | | | | | | | | | | | | |
Other comprehensive income before reclassifications | 48 | 519 | 1 | (77 | ) | $ | 491 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 79 | — | — | $ | 79 | |||||||||||
| | | | | | | | | | | | | | | | | |
Net current-period other comprehensive income | 48 | 598 | 1 | (77 | ) | $ | 570 | ||||||||||
| | | | | | | | | | | | | | | | | |
Separation-related adjustments | 241 | (914 | ) | — | 11 | $ | (662 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2013 | $ | 470 | $ | (827 | ) | $ | 2 | $ | (87 | ) | $ | (442 | ) | ||||
| | | | | | | | | | | | | | | | | |
Other comprehensive income before reclassifications | (1,073 | ) | (827 | ) | 1 | 187 | $ | (1,712 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | — | 46 | — | 77 | $ | 123 | |||||||||||
| | | | | | | | | | | | | | | | | |
Net current-period other comprehensive (loss) income | (1,073 | ) | (781 | ) | 1 | 264 | $ | (1,589 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2014 | $ | (603 | ) | $ | (1,608 | ) | $ | 3 | $ | 177 | $ | (2,031 | ) | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Other comprehensive loss in 2014 includes foreign currency translation adjustments totaling a loss of $1.1 billion, which was principally driven by (i) the impact of the substantial weakening of the Euro in 2014 on the translation of the company's Euro-denominated assets, and (ii) the weakening of foreign currencies in combination with an increased concentration of cash denominated in the foreign currencies accumulated in anticipation of the terminated proposed combination with Shire plc. | |||||||||||||||||
The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2014 and 2013: | |||||||||||||||||
years ended December 31 (in millions) | 2014 | 2013 | |||||||||||||||
| | | | | | | | ||||||||||
Pension and post-employee benefits | |||||||||||||||||
Amortization of actuarial losses and other | $ | 66 | $ | 114 | |||||||||||||
Less tax expense | (20 | ) | (35 | ) | |||||||||||||
| | | | | | | | ||||||||||
Total reclassification, net of tax | $ | 46 | $ | 79 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Hedging activities | |||||||||||||||||
Gains (losses) on designated cash flow hedges | $ | (79 | ) | $ | — | ||||||||||||
Less tax expense | 2 | — | |||||||||||||||
| | | | | | | | ||||||||||
Total reclassification, net of tax | $ | (77 | ) | $ | — | ||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Other | |||||||||||||||||
In addition to common stock, AbbVie's authorized capital includes 200 million shares of preferred stock, par value $0.01. As of December 31, 2014, no shares of preferred stock were issued or outstanding. | |||||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | Note 13 Income Taxes | ||||||||||
Earnings Before Income Taxes | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Domestic | $ | (3,245 | ) | $ | (581 | ) | $ | 625 | |||
Foreign | 5,614 | 5,913 | 5,100 | ||||||||
| | | | | | | | | | | |
Total earnings before income taxes | $ | 2,369 | $ | 5,332 | $ | 5,725 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The increase in the domestic loss before income taxes for the year ended December 31, 2014 was driven by transaction and financing-related costs associated with the terminated proposed combination with Shire. Refer to Note 4 for further information. | |||||||||||
Income Taxes | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Current | |||||||||||
Domestic | $ | 634 | $ | 226 | $ | 94 | |||||
Foreign | 341 | 354 | 252 | ||||||||
| | | | | | | | | | | |
Total current taxes | $ | 975 | $ | 580 | $ | 346 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred | |||||||||||
Domestic | $ | (301 | ) | $ | 678 | $ | 89 | ||||
Foreign | (79 | ) | (54 | ) | 15 | ||||||
| | | | | | | | | | | |
Total deferred taxes | (380 | ) | 624 | 104 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Total income taxes | $ | 595 | $ | 1,204 | $ | 450 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Effective Tax Rate Reconciliation | |||||||||||
years ended December 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Statutory tax rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal benefit | — | 0.3 | 0.1 | ||||||||
Effect of foreign operations | (11.3 | ) | (11.5 | ) | (23.5 | ) | |||||
U.S. tax credits | (8.9 | ) | (2.7 | ) | (1.5 | ) | |||||
Branded prescription drug fee | 3.7 | 0.4 | 0.3 | ||||||||
Valuation allowances | 3.6 | 0.1 | — | ||||||||
Resolution of uncertain tax positions | — | — | (3.4 | ) | |||||||
Non-deductible litigation loss | — | — | 0.6 | ||||||||
All other, net | 3 | 1 | 0.3 | ||||||||
| | | | | | | | | | | |
Effective tax rate | 25.1 | % | 22.6 | % | 7.9 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The effective tax rate fluctuates year to year due to the allocation of the company's taxable earnings among jurisdictions, as well as certain discrete factors and events in each year, including acquisitions and collaborations. The effective tax rate in 2014, 2013 and 2012 differs from the statutory tax rate principally due to the benefit from foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax exemptions and incentives in Puerto Rico and other foreign tax jurisdictions, and business development activities together with the cost of repatriation decisions. The effective tax rate for these periods also reflects the benefit from U.S. tax credits principally related to research and development credits, the orphan drug tax credit and Puerto Rico excise tax credits. The research and development credit for 2014 was due to legislation enacted in the fourth quarter that extended the credit to December 31, 2014. | |||||||||||
The increase in the effective tax rate in 2014 was principally driven by additional expenses of $129 million related to the Branded Prescription Drug Fee, which is non-deductible, and state tax valuation allowances of $129 million as further discussed in the "Deferred Tax Assets and Liabilities" section following. On July 28, 2014, the Internal Revenue Service issued final rules and regulations for the Branded Prescription Drug Fee, an annual non-tax-deductible fee payable to the federal government under the Affordable Care Act based on an allocation of a company's market share for branded prescription drugs sold to certain government programs in the prior year. The final rules accelerated the expense recognition criteria for the fee obligation from the year in which the fee is paid, to the year in which the market share used to allocate the fee is determined. This change required AbbVie and other industry participants to recognize an additional year of expense in 2014. | |||||||||||
The effective income tax rate in 2014 and 2013 reflects income tax expenses relating to current earnings outside the United States that are not deemed indefinitely reinvested. In 2012, the effective income tax rate includes the recognition of tax benefits totaling approximately $195 million as a result of favorable resolutions of various tax positions pertaining to prior years. | |||||||||||
Puerto Rico enacted legislation that assesses an excise tax beginning in 2011 on certain products manufactured in Puerto Rico. The tax is levied on gross inventory purchases from entities in Puerto Rico and is included in cost of products sold in the consolidated statements of earnings. The majority of the tax is creditable for U.S. income tax purposes. | |||||||||||
Deferred Tax Assets and Liabilities | |||||||||||
as of December 31 (in millions) | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Deferred tax assets | |||||||||||
Compensation and employee benefits | $ | 627 | $ | 279 | |||||||
Accruals and reserves | 376 | 252 | |||||||||
Chargebacks and rebates | 297 | 333 | |||||||||
Deferred revenue | 382 | 348 | |||||||||
Depreciation | 53 | 64 | |||||||||
State income taxes | 62 | 67 | |||||||||
Other | 230 | 122 | |||||||||
Net operating losses and other credit carryforwards | 125 | 115 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 2,152 | 1,580 | |||||||||
Valuation allowances | (172 | ) | (43 | ) | |||||||
| | | | | | | | ||||
Total net deferred tax assets | $ | 1,980 | $ | 1,537 | |||||||
| | | | | | | | ||||
Deferred tax liabilities | |||||||||||
Excess of book basis over tax basis of intangible assets | $ | (331 | ) | $ | (508 | ) | |||||
Repatriation of foreign earnings | (326 | ) | (606 | ) | |||||||
| | | | | | | | ||||
Total deferred tax liabilities | $ | (657 | ) | $ | (1,114 | ) | |||||
| | | | | | | | ||||
Net deferred tax asset | $ | 1,323 | $ | 423 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Gross federal net operating loss carryforwards as of December 31, 2014 were $19 million and are available for use through 2030. Gross state net operating loss and tax credit carryforwards as of December 31, 2014 were $1.1 billion and $91 million, respectively. The state tax carryforwards expire in periods between 2017 and 2034. As of December 31, 2014, foreign net operating loss carryforwards were $113 million. The majority of the foreign loss carryforwards do not have an expiration period. | |||||||||||
As of December 31, 2014 and 2013, the company had valuation allowances of $172 million and $43 million, respectively, principally related to state net operating losses and credit carryforwards that are not expected to be realized. | |||||||||||
Deferred income taxes have not been provided on approximately $23 billion of the undistributed earnings of foreign subsidiaries as these earnings have been indefinitely reinvested for continued use in foreign operations. Due to the complexities in tax laws and assumptions that would have to be made, it is not practicable to estimate the amount of income taxes that would be due if these earnings were distributed. | |||||||||||
Unrecognized Tax Benefits | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Balance as of January 1 | $ | 247 | $ | 1,140 | $ | 1,039 | |||||
Increase due to current year tax positions | 115 | 195 | 370 | ||||||||
Increase due to prior year tax positions | 67 | — | 1 | ||||||||
Decrease due to prior year tax positions | (6 | ) | — | (220 | ) | ||||||
Settlements | — | — | (50 | ) | |||||||
Lapse of statutes of limitations | (2 | ) | — | — | |||||||
Separation-related adjustments | — | (1,088 | ) | — | |||||||
| | | | | | | | | | | |
Balance as of December 31 | $ | 421 | $ | 247 | $ | 1,140 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
AbbVie and Abbott entered into a tax sharing agreement, effective on the date of separation, which provides that Abbott is liable for and has indemnified AbbVie against all income tax liabilities for periods prior to the separation. | |||||||||||
The table above reflects the 2013 reduction of $1.1 billion relating to tax periods prior to the separation for which Abbott is the primary obligor. However, under U.S. Treasury Regulations, each member of a consolidated group is severally liable for the U.S. federal income tax liability of each other member of the consolidated group. Accordingly, with respect to periods in which AbbVie was included in Abbott's consolidated group, AbbVie could be liable to the U.S. government for any U.S. federal income tax liability incurred by the consolidated group, to the extent not discharged by any other member. However, if any such liability were imposed, AbbVie would be entitled to be indemnified by Abbott pursuant to the tax sharing agreement. | |||||||||||
AbbVie will be responsible for unrecognized tax benefits and related interest and penalties for periods after separation or in instances where an existing entity was transferred to AbbVie upon separation. As a result, AbbVie has continued to account for these tax uncertainties. To the extent that these obligations relate to periods prior to the separation, a reimbursement receivable of approximately $41 million has been recorded within other assets at December 31, 2014. | |||||||||||
If recognized, the net amount of potential tax benefits that would impact the company's effective tax rate is $389 million and $218 million in 2014 and 2013, respectively. The company is routinely audited by the tax authorities in significant jurisdictions, and a number of audits are currently underway. It is reasonably possible during the next twelve months that uncertain tax positions may be settled, which could result in a decrease in the gross amount of unrecognized tax benefits. Due to the potential for resolution of federal, state, and foreign examinations, and the expiration of various statutes of limitation, the company's gross unrecognized tax benefits balance may change within the next twelve months up to $31 million. All significant federal, state, local, and international matters have been concluded for years through 2005. The company believes adequate provision has been made for all income tax uncertainties. | |||||||||||
AbbVie recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. The amounts expensed and the liabilities accrued are immaterial as of and for the years ended December 31, 2014, 2013, and 2012. Uncertain tax positions are generally included as a long-term liability on the consolidated balance sheets. | |||||||||||
Legal_Proceedings_and_Continge
Legal Proceedings and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Legal Proceedings and Contingencies | |
Legal Proceedings and Contingencies | Note 14 Legal Proceedings and Contingencies |
Subject to certain exceptions specified in the separation agreement, 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 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. AbbVie is involved in various claims, legal proceedings and investigations, including those described below. The recorded accrual balance for litigation at December 31, 2014 was not significant. Within the next year, other legal proceedings may occur that may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all other proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie's consolidated financial position, cash flows, or results of operations. | |
Several pending lawsuits filed against Unimed Pharmaceuticals, Inc., Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) and others were consolidated for pre-trial purposes in the United States District Court for the Northern District of Georgia under the Multi-District Litigation Rules as In re AndroGel Antitrust Litigation, MDL No. 2084. These cases, brought by private plaintiffs and the Federal Trade Commission (FTC), generally allege Solvay's 2006 patent litigation involving AndroGel was sham litigation and the patent litigation settlement agreement and related agreements with three generic companies violate federal and state antitrust laws and state consumer protection and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. MDL 2084 includes: (a) three individual plaintiff lawsuits; (b) seven purported class actions; and (c) Federal Trade Commission v. Watson Pharmaceuticals, Inc. et al., filed in May 2009 in the United States District Court for the Northern District of Georgia. Following the district court's dismissal of all plaintiffs' claims, appellate proceedings led to the reinstatement of the claims regarding the patent litigation settlement, which are proceeding in discovery in the district court. | |
In September 2014, the Federal Trade Commission (FTC) filed suit in the United States District Court for the Eastern District of Pennsylvania against AbbVie and others, alleging that 2011 patent litigation with two generic companies regarding AndroGel was sham litigation and the patent litigation settlement with one of those generic companies violates federal antitrust laws. The FTC's complaint seeks monetary damages and injunctive relief. | |
In August 2013, a putative class action lawsuit, Sidney Hillman Health Center of Rochester, et al. v. AbbVie Inc., et al., was filed against AbbVie in the United States District Court for the Northern District of Illinois by three healthcare benefit providers alleging violations of federal RICO statutes and state deceptive business practice and unjust enrichment laws in connection with reimbursements for certain uses of Depakote from 1998 to 2012. Plaintiffs seek monetary damages and/or equitable relief and attorneys' fees. On August 14, 2014, the district court dismissed all of the plaintiffs' claims with prejudice. Plaintiffs have appealed the district court's decision to the United States Court of Appeals for the Seventh Circuit, where the matter is currently pending. | |
Lawsuits have been filed 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 Laboratories in 2006 and presently a subsidiary of AbbVie) and a generic company violates 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. In September 2013, all of these pending putative class action lawsuits were centralized for consolidated or coordinated pre-trial proceedings in the United States District Court for the Eastern District of Pennsylvania under the Multi-District Litigation Rules as In re Niaspan Antitrust Litigation, MDL No. 2460. | |
In November 2007, GlaxoSmithKline filed a lawsuit against Abbott Laboratories in the United States District Court for the Northern District of California alleging that Abbott violated antitrust laws in connection with the 2003 Norvir re-pricing. In March 2011, a jury found that Abbott did not violate antitrust laws, but breached its license agreement with the plaintiff. In January 2014, a 3-judge panel of the United States Court of Appeals for the Ninth Circuit reversed this verdict and remanded the case for a new trial due to the alleged improper exclusion of a potential juror. The case has been returned to the trial court for further proceedings. AbbVie assumed the liability for and control of this proceeding in connection with its separation from Abbott. | |
AbbVie is seeking to enforce its patent rights relating to testosterone gel (a drug AbbVie sells under the trademark AndroGel® 1.62%). In a case filed in the United States District Court for the District of Delaware in February 2013, AbbVie alleges that Perrigo Company's and Perrigo Israel Pharmaceutical Ltd.'s proposed generic product infringes AbbVie patents and seeks declaratory and injunctive relief. In a second case filed in the United States District Court for the District of Delaware in March 2013, AbbVie alleges that Watson Laboratories Inc.'s and Actavis Inc.'s proposed generic product infringes AbbVie's patents and seeks declaratory and injunctive relief. In November 2014, AbbVie, Watson and Actavis entered into a confidential settlement and license agreement. The litigation was dismissed by stipulation of the parties. | |
AbbVie is seeking to enforce its patent rights relating to ritonavir/lopinavir tablets (a drug AbbVie sells under the trademark Kaletra®). In a case filed in the United States District Court for the Northern District of Illinois in March 2009, AbbVie alleges that Matrix Laboratories, Inc.'s, Matrix Laboratories, Ltd.'s, and Mylan, Inc.'s proposed generic products infringe AbbVie's patents and seeks declaratory and injunctive relief. Upon Matrix's motion in November 2009, the court granted a five-year stay of the litigation unless good cause to lift the stay is shown. On July 1, 2014, the stay was lifted pursuant to the original terms of the court order entered in 2009. | |
AbbVie is seeking to enforce its patent rights relating to ritonavir tablets (a drug AbbVie sells under the trademark Norvir®). In a case pending in the United States District Court for the Southern District of Ohio since April 2012, AbbVie alleges that Roxane Laboratories, Inc.'s (Roxane) proposed generic product infringes AbbVie's patents and seeks declaratory and injunctive relief. In another case filed in the United States District Court for the Southern District of Ohio in July 2013, AbbVie alleges that Roxane's proposed generic ritonavir product infringes additional AbbVie patents and seeks declaratory and injunctive relief on these additional patents. In September 2014, AbbVie and Roxane entered into a settlement and license agreement, the date of which license is confidential. The parties entered into a stipulation to dismiss the Ohio litigation. In a separate case filed in the United States District Court for the District of Delaware in May 2013, AbbVie alleges that Hetero USA Inc.'s and Hetero Labs Limited's proposed generic ritonavir tablets product infringes AbbVie's patents and seeks declaratory and injunctive relief. In November 2014, AbbVie and Hetero entered into a confidential settlement and license agreement and the litigation was dismissed by stipulation of the parties. In a separate case filed in the United States District Court for the District of Delaware in July 2014, AbbVie alleges that Aurobindo Pharma Limited and Aurobindo Pharma USA Inc.'s proposed generic ritonavir tablets product infringes AbbVie's patents and seeks declaratory and injunctive relief. In December 2014, AbbVie and Aurobindo entered into a confidential settlement and license agreement and the litigation was dismissed by stipulation of the parties. In a separate case filed in the United States District Court for the District of Delaware in October 2014, AbbVie alleges that Mylan Pharmaceutical Inc.'s proposed generic ritonavir tablets product infringes AbbVie's patents and seeks declaratory and injunctive relief. | |
AbbVie is seeking to enforce certain patent rights that cover the use of fully human anti-TNF alpha antibodies with methotrexate to treat rheumatoid arthritis. In a case filed in the United States District Court for the District of Massachusetts in May 2009, AbbVie alleges Centocor Ortho Biotech, Inc.'s (now Janssen Biotech, Inc.'s) product Simponi® infringes AbbVie's patents and seeks damages and injunctive relief. In December 2014, the parties entered into a settlement and license agreement, the terms of which are confidential. The litigation was dismissed with prejudice. | |
In November 2014, five individuals filed a putative class action lawsuit on behalf of purchasers and sellers of certain Shire plc securities between June 20 and October 14, 2014, against AbbVie and its chief executive officer in the United States District Court for the Northern District of Illinois alleging that the defendants made and/or are responsible for material misstatements in violation of federal securities laws in connection with AbbVie's proposed transaction with Shire. The complaint seeks unspecified monetary damages and injunctive relief. | |
In November 2014, a putative class action lawsuit, Medical Mutual of Ohio v. AbbVie Inc., et al., was filed against several manufacturers of testosterone replacement therapies ("TRTs"), including AbbVie, in the United States District Court for the Northern District of Illinois on behalf of all insurance companies, health benefit providers, and other third-party payors who paid for TRTs, including AndroGel. The claims asserted include violations of the federal Racketeer Influenced and Corrupt Organizations Act and state consumer fraud and deceptive trade practices laws. The complaint seeks unspecified monetary and injunctive relief. | |
In December 2014, a shareholder derivative lawsuit, Plumbers & Steamfitters Local 60 Pension Plans v. J.P. Morgan Securities LLC, et al., was filed in Delaware Chancery Court, alleging that AbbVie's directors breached their fiduciary duties in connection with the Shire transaction approval and termination. The lawsuit seeks unspecified compensatory damages for AbbVie, among other relief. | |
Segment_and_Geographic_Area_In
Segment and Geographic Area Information | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Segment Information | |||||||||||
Segment Information | Note 15 Segment and Geographic Area Information | ||||||||||
AbbVie operates in one business segment—pharmaceutical products. Substantially all of AbbVie's U.S. sales are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served. Worldwide net sales of key products were as follows: | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
HUMIRA | $ | 12,543 | $ | 10,659 | $ | 9,265 | |||||
AndroGel | 934 | 1,035 | 1,152 | ||||||||
Kaletra | 870 | 962 | 1,013 | ||||||||
Synagis | 835 | 827 | 825 | ||||||||
Lupron | 778 | 785 | 800 | ||||||||
Synthroid | 709 | 622 | 551 | ||||||||
Sevoflurane | 550 | 568 | 602 | ||||||||
Creon | 516 | 412 | 353 | ||||||||
Dyslipidemia products | 328 | 1,076 | 2,145 | ||||||||
Duodopa | 220 | 178 | 149 | ||||||||
VIEKIRA | 48 | — | — | ||||||||
All other | 1,629 | 1,666 | 1,525 | ||||||||
| | | | | | | | | | | |
Net sales | $ | 19,960 | $ | 18,790 | $ | 18,380 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net sales to external customers, based on the country that sold the product, were as follows: | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
United States | $ | 10,845 | $ | 10,181 | $ | 10,435 | |||||
Germany | 1,035 | 911 | 756 | ||||||||
The Netherlands | 969 | 858 | 776 | ||||||||
United Kingdom | 722 | 606 | 552 | ||||||||
France | 584 | 540 | 500 | ||||||||
Japan | 581 | 625 | 718 | ||||||||
Canada | 551 | 538 | 500 | ||||||||
Spain | 534 | 543 | 525 | ||||||||
Brazil | 435 | 439 | 434 | ||||||||
Italy | 432 | 404 | 408 | ||||||||
All other countries | 3,272 | 3,145 | 2,776 | ||||||||
| | | | | | | | | | | |
Net sales | $ | 19,960 | $ | 18,790 | $ | 18,380 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-lived assets include net property and equipment of $2.5 billion and $2.3 billion as of December 31, 2014 and 2013, of which $1.8 billion and $1.6 billion, respectively, was located in the United States and Puerto Rico and $551 million and $591 million, respectively, was located in Europe. | |||||||||||
Quarterly_Financial_Data_unaud
Quarterly Financial Data (unaudited) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Quarterly Financial Data (unaudited) | ||||||||||
Quarterly Financial Data (unaudited) | Note 16 Quarterly Financial Data (unaudited) | |||||||||
(in millions except per share data) | 2014 | 2013 | ||||||||
| | | | | | | | | | |
First Quarter | ||||||||||
Net sales | $ | 4,563 | $ | 4,329 | ||||||
Gross margin | 3,463 | 3,176 | ||||||||
Net earnings | 980 | 968 | ||||||||
Basic earnings per share | 0.61 | 0.61 | ||||||||
Diluted earnings per share | 0.61 | 0.6 | ||||||||
Cash dividends declared per common share | 0.42 | 0.8 | (a) | |||||||
Second Quarter | ||||||||||
Net sales | $ | 4,926 | $ | 4,692 | ||||||
Gross margin | 3,813 | 3,638 | ||||||||
Net earnings | 1,098 | 1,068 | ||||||||
Basic earnings per share | 0.69 | 0.67 | ||||||||
Diluted earnings per share | 0.68 | 0.66 | ||||||||
Cash dividends declared per common share | 0.42 | 0.4 | ||||||||
Third Quarter | ||||||||||
Net sales | $ | 5,019 | $ | 4,658 | ||||||
Gross margin | 3,925 | 3,566 | ||||||||
Net earnings | 506 | 964 | ||||||||
Basic earnings per share | 0.32 | 0.6 | ||||||||
Diluted earnings per share | 0.31 | 0.6 | ||||||||
Cash dividends declared per common share | 0.42 | 0.4 | ||||||||
Fourth Quarter | ||||||||||
Net sales | $ | 5,452 | $ | 5,111 | ||||||
Gross margin | 4,333 | 3,829 | ||||||||
Net (loss) earnings | (b) | (810 | ) | 1,128 | ||||||
Basic (loss) earnings per share | (c) | (0.51 | ) | 0.7 | ||||||
Diluted (loss) earnings per share | (c) | (0.51 | ) | 0.7 | ||||||
Cash dividends declared per common share | 0.49 | 0.4 | ||||||||
| | | | | | | | | | |
(a) | On January 4, 2013, a cash dividend of $0.40 per share of common stock was declared from pre-separation earnings and was recorded as a reduction of additional paid-in capital. Refer to Note 12 for additional information regarding cash dividends declared in 2013. | |||||||||
(b) | Results for the fourth quarter of 2014 include transaction and financing-related and other costs incurred in connection with the terminated proposed combination with Shire, a $750 million after-tax charge related to a research and development collaboration agreement with Calico, and a $173 million after-tax charge as a result of entering into a global collaboration with Infinity. Refer to Notes 4 and 6 for further information relating to the termination of the proposed combination with Shire and the collaborations with Calico and Infinity, respectively. | |||||||||
(c) | Basic loss per share for the fourth quarter of 2014 was calculated under the treasury-stock method as it was more dilutive. Approximately 36 million common shares were excluded from the computation of diluted (loss) per share assuming dilution because the effect would have been anti-dilutive. | |||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Summary of Significant Accounting Policies | ||||||||
Use of Estimates | Use of Estimates | |||||||
The financial statements have been prepared in accordance with U.S. GAAP and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for sales rebates, pension and post-employment benefits, income taxes, litigation, valuation of intangible assets and goodwill, financial instruments, and inventory and accounts receivable exposures. | ||||||||
Basis of Consolidation | Basis of Consolidation | |||||||
The consolidated financial statements as of and for the years ended December 31, 2014 and 2013 include the accounts of AbbVie and all of its subsidiaries in which a controlling interest is maintained. Controlling interest is determined by majority ownership interest and the absence of substantive third-party participating rights or, in the case of variable interest entities, where AbbVie is determined to be the primary beneficiary. Investments in companies over which AbbVie has a significant influence but not a controlling interest are accounted for using the equity method with AbbVie's share of earnings or losses reported in other income, net. All other investments are generally accounted for using the cost method. Intercompany balances and transactions are eliminated. | ||||||||
Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period presentation. | ||||||||
Revenue Recognition | Revenue Recognition | |||||||
AbbVie recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability of the sales price is reasonably assured. Revenue from product sales is recognized when title and risk of loss have passed to the customer. Provisions for discounts, rebates and sales incentives to customers and returns and other adjustments are provided for in the period the related sales are recorded. Sales incentives to customers are not material. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer's normal requirements are recorded when the conditions noted above are met. In those situations, management records a returns reserve for such revenue, if necessary. Sales of product rights for marketable products are recorded as revenue upon disposition of the rights. | ||||||||
Research and Development Costs | Research and Development Costs | |||||||
Internal research and development (R&D) costs are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development collaborations for pre-commercialization milestones, the milestone payment obligations are expensed when the milestone results are achieved. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in intangible assets, net of accumulated amortization. | ||||||||
Collaborations and Other Arrangements | Collaborations and Other Arrangements | |||||||
The company enters into collaborative agreements with third parties to develop and commercialize drug candidates. Collaborative activities may include joint research and development and commercialization of new products. AbbVie generally receives certain licensing rights under these arrangements. These collaborations often require upfront payments and may include additional milestone, research and development cost sharing, royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development and commercialization. Upfront payments associated with collaborative arrangements during the development stage are expensed to acquired in-process research and development (IPR&D). Subsequent payments made to the partner for the achievement of milestones during the development stage are expensed to R&D when the milestone is achieved. Milestone payments made to the partner subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of products sold over the estimated useful life of the related asset. Royalties are expensed as cost of products sold when incurred. | ||||||||
Advertising | Advertising | |||||||
Costs associated with advertising are expensed as incurred and are included in SG&A in AbbVie's consolidated statements of earnings. Advertising expenses were $665 million, $626 million, and $506 million in 2014, 2013 and 2012, respectively. | ||||||||
Pension and Post-Employment Benefits | Pension and Post-Employment Benefits | |||||||
AbbVie records annual expenses relating to its defined benefit pension and other post-employment plans based on calculations which include various actuarial assumptions, including discount rates, assumed asset rates of return, compensation increases, turnover rates and health care cost trend rates. AbbVie reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. Actuarial losses and gains are amortized over the remaining service attribution periods of the employees under the corridor method, in accordance with the rules for accounting for post-employment benefits. Differences between the expected long-term return on plan assets and the actual annual return are amortized to net period benefit cost over a five-year period. | ||||||||
Prior to separation, AbbVie employees participated in certain defined benefit pension and other post-employment plans sponsored by Abbott, which included participants of Abbott's other businesses. Such plans were accounted for as multiemployer plans in AbbVie's historical combined financial statements as of and for the year ended December 31, 2012. As a result, no asset or liability was recorded by AbbVie in the historical combined balance sheets to recognize the funded status of these plans. In 2013, subsequent to the separation from Abbott, AbbVie's portion of the defined benefit pension plans was separated from the Abbott defined benefit pension plans using a December 31, 2012 measurement date. As a result, the funded status for each plan is reflected in AbbVie's consolidated balance sheets as of December 31, 2014 and 2013. AbbVie is the sole sponsor for certain defined benefit pension and other post-employment plans. The funded status of these plans was recorded in AbbVie's combined balance sheet at December 31, 2012 and the consolidated balance sheets at December 31, 2014 and 2013. | ||||||||
Refer to Note 11 for information regarding AbbVie's pension and post-employment plans. | ||||||||
Income Taxes | Income Taxes | |||||||
Income taxes are accounted for under the asset and liability method. Provisions for federal, state and foreign income taxes are calculated on reported pretax earnings based on current tax laws. Deferred taxes are provided using enacted tax rates on the future tax consequences of temporary differences, which are the differences between the financial statement carrying amount of assets and liabilities and their respective tax bases and the tax benefits of carryforwards. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. | ||||||||
In AbbVie's financial statements for periods prior to 2013, income tax expense and tax balances were calculated as if AbbVie was a separate taxpayer, although AbbVie's operations were historically included in tax returns filed by Abbott. After separation, AbbVie's income tax expense and income tax balances represent AbbVie's federal, state and foreign income taxes as an independent company. As a result, its effective tax rate and income tax balances are not necessarily comparable to those for periods prior to the separation. | ||||||||
Cash and Equivalents | Cash and Equivalents | |||||||
Cash and equivalents include time deposits, money market funds, and treasury securities with original maturities at the time of purchase of three months or less. | ||||||||
Investments | Investments | |||||||
Short-term investments consist primarily of time deposits and held-to-maturity debt. Investments in marketable equity securities are classified as available-for-sale and are recorded at fair value with any unrealized holding gains or losses, net of tax, included in accumulated other comprehensive loss in AbbVie's consolidated balance sheets. Investments in equity securities that are not traded on public stock exchanges and held-to-maturity debt securities are recorded at cost. | ||||||||
AbbVie reviews the carrying value of investments each quarter to determine whether an other than temporary decline in fair value exists. AbbVie considers factors affecting the investee, factors affecting the industry the investee operates in and general equity market trends. The company considers the length of time an investment's fair value has been below cost and the near-term prospects for recovery. When AbbVie determines that an other than temporary decline has occurred, the cost basis investment is written down with a charge to other income, net and the available-for-sale securities' unrealized loss is recognized as a charge to income and removed from accumulated other comprehensive loss (AOCI). | ||||||||
Accounts Receivable | Accounts Receivable | |||||||
Accounts receivable are stated at their net realizable value. The allowance against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Accounts receivable are written off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. The allowance was $74 million at December 31, 2014 and $88 million at December 31, 2013. | ||||||||
Inventories | Inventories | |||||||
Inventories are valued at the lower of cost (first-in, first-out basis) or market. Cost includes material and conversion costs. Inventories, net, consist of the following: | ||||||||
as of December 31 (in millions) | 2014 | 2013 | ||||||
| | | | | | | | |
Finished goods | $ | 341 | $ | 485 | ||||
Work-in-process | 629 | 404 | ||||||
Materials | 154 | 261 | ||||||
| | | | | | | | |
Inventories, net | $ | 1,124 | $ | 1,150 | ||||
| | | | | | | | |
| | | | | | | | |
Property and Equipment | Property and Equipment | |||||||
as of December 31 (in millions) | 2014 | 2013 | ||||||
| | | | | | | | |
Land | $ | 48 | $ | 50 | ||||
Buildings | 1,228 | 1,263 | ||||||
Equipment | 5,324 | 5,214 | ||||||
Construction in progress | 505 | 382 | ||||||
| | | | | | | | |
Property and equipment, gross | 7,105 | 6,909 | ||||||
Less accumulated depreciation | (4,620 | ) | (4,611 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 2,485 | $ | 2,298 | ||||
| | | | | | | | |
| | | | | | | | |
Depreciation for property and equipment is recorded on a straight-line basis over the estimated useful lives of the assets. The estimated useful life for buildings ranges from 10 to 50 years and five to 20 years for equipment. Leasehold improvements are amortized over the life of the related facility lease (including any renewal periods, if appropriate) or the asset, whichever is shorter. Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $383 million, $388 million and $525 million, respectively. Equipment includes certain computer software and software development costs incurred in connection with developing or obtaining software for internal use and is amortized over three to 10 years. Assets under capital leases included in property and equipment in the consolidated balance sheets are not material. | ||||||||
Litigation | Litigation | |||||||
Loss contingency provisions are recorded for probable losses when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. When a best estimate cannot be made, the minimum loss contingency amount in a probable range is recorded. Legal fees are expensed as incurred. | ||||||||
Product Liability | Product Liability | |||||||
AbbVie accrues for product liability claims, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The liabilities are adjusted quarterly as additional information becomes available. Receivables for insurance recoveries, if any, for product liability claims are recorded as assets, on an undiscounted basis, when it is probable that a recovery will be realized. | ||||||||
Business Combinations | Business Combinations | |||||||
Results of operations of acquired companies are included in AbbVie's results of operations beginning on the respective acquisition dates. Assets acquired and liabilities assumed are recognized at the date of acquisition at their respective fair values. Any excess of the fair value consideration transferred over the estimated fair values of the net assets acquired is recognized as goodwill. Contingent consideration is recognized at the estimated fair value on the acquisition date, which is determined by utilizing a probability weighted discounted cash flow model. Subsequent changes to the fair value of contingent payments are recognized in other income, net in the consolidated statements of earnings. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred. | ||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||
Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, and terminal values of market participants. Definite-lived intangibles are amortized over their estimated useful lives. AbbVie reviews the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. AbbVie first compares the projected undiscounted cash flows to be generated by the asset to its carrying value. If the undiscounted cash flows of an intangible asset are less than the carrying value of an intangible asset, the intangible asset is written down to its fair value, which is usually the discounted cash flow amount, and a loss is recorded equal to the excess of the asset's net carrying value over its fair value. Where cash flows cannot be identified for an individual asset, the review is applied at the lowest level for which cash flows are largely independent of the cash flows of other assets and liabilities. | ||||||||
Goodwill and indefinite-lived assets are not amortized but are subject to an impairment review annually and more frequently when indicators of impairment exist. An impairment of goodwill would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. Indefinite-lived intangible assets, which consist of capitalized IPR&D, would occur if the fair value of the IPR&D intangible asset is less than the carrying amount. | ||||||||
The company tests its goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If the company concludes it is more likely than not that the fair value of reporting unit is less than its carrying amount, a quantitative impairment test is performed. AbbVie tests indefinite-lived intangible assets using a quantitative impairment test. For its quantitative impairment tests, the company uses an estimated future cash flow approach that requires significant judgment with respect to future volume, revenue and expense growth rates, changes in working capital use, foreign currency exchange rates, the selection of an appropriate discount rate, asset groupings and other assumptions and estimates. The estimates and assumptions used are consistent with the company's business plans and a market participant's views of a company and similar companies. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the assets, and potentially result in different impacts to the company's results of operations. Actual results may differ from the company's estimates. | ||||||||
Based upon the company's most recent annual impairment test performed in the third quarter of 2014, the company concluded goodwill was not impaired. In 2014, AbbVie recorded an impairment charge of $37 million related to certain on-market product rights in Japan due to increased generic competition. The charge was included in cost of products sold. In 2012, AbbVie recorded impairment charges of $13 million for certain projects under development. These charges were included in R&D expense. There were no impairment charges recorded in 2013. | ||||||||
Acquired In-Process Research and Development | Acquired In-Process Research and Development | |||||||
The initial costs of rights to IPR&D projects acquired in an asset acquisition are expensed as IPR&D unless the project has an alternative future use. These costs include initial payments incurred prior to regulatory approval in connection with research and development collaboration agreements that provide rights to develop, manufacture, market and/or sell pharmaceutical products. The fair value of IPR&D projects acquired in a business combination are capitalized and accounted for as indefinite-lived intangible assets until the underlying project receives regulatory approval, at which point the intangible asset will be accounted for as a definite-lived intangible asset, or discontinuation, at which point the intangible asset will be written off. Development costs incurred after the acquisition are expensed as incurred. Indefinite- and definite-lived assets are subject to impairment reviews as discussed previously. | ||||||||
Foreign Currency Translation | Foreign Currency Translation | |||||||
Foreign subsidiary earnings are translated into U.S. dollars using average exchange rates. The net assets of foreign subsidiaries are translated into U.S. dollars using period end exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recognized in other comprehensive (loss) income. The net assets of subsidiaries in highly inflationary economies are remeasured as if the functional currency were the reporting currency. The remeasurement is recognized in earnings and is immaterial for all years presented. | ||||||||
Derivatives | Derivatives | |||||||
All derivative instruments are recognized as either assets or liabilities at fair value in AbbVie's balance sheets and are classified as current or long-term based on the scheduled maturity of the instrument. The accounting for changes in the fair value of a derivative instrument depends on whether it has been formally designated and qualifies as part of a hedging relationship under the applicable accounting standards and, further, on the type of hedging relationship. | ||||||||
For derivatives formally designated as hedges, the company assesses at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The changes in fair value of a derivative designated as a fair value hedge and of the hedged item attributable to the hedge risk are recognized in earnings immediately. Fair value hedges are used to hedge the interest rate risk associated with certain of the company's fixed-rate debt. The effective portions of changes in the fair value of a derivative designated as a cash flow hedge are reported in accumulated other comprehensive loss and are subsequently recognized in earnings consistent with the underlying hedged item. Cash flow hedges are used to manage exposures from changes in foreign currency exchange rates. | ||||||||
The derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings. If it is determined that a derivative is no longer highly effective as a hedge, the company discontinues hedge accounting prospectively. Gains or losses are immediately reclassified from accumulated other comprehensive loss to earnings relating to hedged forecasted transactions that are no longer probable of occurring. Gains or losses relating to terminations of effective cash flow hedges in which the forecasted transactions are still probable of occurring are deferred and recognized consistent with the income or loss recognition of the underlying hedged items. Terminations of a fair value hedges result in fair value adjustments to the hedged items until the date of termination with the new bases being accreted to par value on the date of maturity. | ||||||||
Derivatives, including those that are not designated as a hedge, are principally classified in the operating section of the consolidated statements of cash flows, consistent with the underlying hedged item. | ||||||||
Refer to Note 10 for information regarding AbbVie's derivative and hedging activities. | ||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40). The amendments in ASU 2014-09 supersede most current revenue recognition requirements. The core principal of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. AbbVie is currently assessing the impact of adopting this guidance to its consolidated financial statements. | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Summary of Significant Accounting Policies | ||||||||
Schedule of inventories, net | ||||||||
as of December 31 (in millions) | 2014 | 2013 | ||||||
| | | | | | | | |
Finished goods | $ | 341 | $ | 485 | ||||
Work-in-process | 629 | 404 | ||||||
Materials | 154 | 261 | ||||||
| | | | | | | | |
Inventories, net | $ | 1,124 | $ | 1,150 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of property and equipment, net | ||||||||
as of December 31 (in millions) | 2014 | 2013 | ||||||
| | | | | | | | |
Land | $ | 48 | $ | 50 | ||||
Buildings | 1,228 | 1,263 | ||||||
Equipment | 5,324 | 5,214 | ||||||
Construction in progress | 505 | 382 | ||||||
| | | | | | | | |
Property and equipment, gross | 7,105 | 6,909 | ||||||
Less accumulated depreciation | (4,620 | ) | (4,611 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 2,485 | $ | 2,298 | ||||
| | | | | | | | |
| | | | | | | | |
Supplemental_Financial_Informa1
Supplemental Financial Information (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplemental Financial Information | |||||||||||
Schedule of interest expense, net | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Interest expense | $ | 429 | $ | 299 | $ | 104 | |||||
Interest and dividend income | (38 | ) | (21 | ) | (20 | ) | |||||
| | | | | | | | | | | |
Interest expense, net | $ | 391 | $ | 278 | $ | 84 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of accounts payable and accrued liabilities | |||||||||||
as of December 31 (in millions) | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Sales rebates | $ | 1,384 | $ | 1,401 | |||||||
Accounts payable | 881 | 933 | |||||||||
Due to Abbott Laboratories | 536 | 876 | |||||||||
Dividends payable | 791 | 643 | |||||||||
Salaries, wages and commissions | 623 | 621 | |||||||||
Royalty license arrangements | 821 | 443 | |||||||||
Other | 1,918 | 1,531 | |||||||||
| | | | | | | | ||||
Accounts payable and accrued liabilities | $ | 6,954 | $ | 6,448 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of long-term liabilities | |||||||||||
as of December 31 (in millions) | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Deferred income taxes | $ | 630 | $ | 570 | |||||||
Pension and other post-employment benefits | 2,220 | 1,628 | |||||||||
Other | 990 | 1,337 | |||||||||
| | | | | | | | ||||
Long-term liabilities | $ | 3,840 | $ | 3,535 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||
Schedule of intangible assets | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
(in millions) | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||
carrying | amortization | carrying | carrying | amortization | carrying | |||||||||||||||
amount | amount | amount | amount | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Definite-lived intangible assets | ||||||||||||||||||||
Developed product rights | $ | 4,546 | $ | (3,706 | ) | $ | 840 | $ | 4,744 | $ | (3,503 | ) | $ | 1,241 | ||||||
License agreements | 1,097 | (869 | ) | 228 | 994 | (792 | ) | 202 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total definite-lived intangible assets | 5,643 | (4,575 | ) | 1,068 | 5,738 | (4,295 | ) | 1,443 | ||||||||||||
Indefinite-lived research and development | 445 | — | 445 | 447 | — | 447 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total intangible assets | $ | 6,088 | $ | (4,575 | ) | $ | 1,513 | $ | 6,185 | $ | (4,295 | ) | $ | 1,890 | ||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Restructuring_Plans_Tables
Restructuring Plans (Tables) (Restructuring Plan 2014 and Prior Years) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Restructuring Plan 2014 and Prior Years | |||||
Restructuring Plans | |||||
Summary of the cash activity in the restructuring reserve | |||||
(in millions) | |||||
| | | | | |
Accrued balance at December 31, 2011 | $ | 149 | |||
2012 restructuring charges | 191 | ||||
Payments and other adjustments | (107 | ) | |||
| | | | | |
Accrued balance at December 31, 2012 | 233 | ||||
2013 restructuring charges | 76 | ||||
Payments and other adjustments | (118 | ) | |||
| | | | | |
Accrued balance at December 31, 2013 | 191 | ||||
2014 restructuring charges | 16 | ||||
Payments and other adjustments | (85 | ) | |||
| | | | | |
Accrued balance at December 31, 2014 | $ | 122 | |||
| | | | | |
| | | | | |
Debt_Credit_Facilities_and_Com1
Debt, Credit Facilities, and Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||||||||||||
Summary of long term debt | ||||||||||||||
(in millions) | Effective | 2014 | Effective | 2013 | ||||||||||
interest rate | interest rate | |||||||||||||
in 2014(a) | in 2013(a) | |||||||||||||
| | | | | | | | | | | | | | |
Floating rate notes due 2015 | 1.09 | % | $ | 500 | 1.14 | % | $ | 500 | ||||||
1.2% notes due 2015 | 1.31 | % | 3,500 | 1.31 | % | 3,500 | ||||||||
1.75% notes due 2017 | 1.86 | % | 4,000 | 1.86 | % | 4,000 | ||||||||
2.0% notes due 2018 | 2.15 | % | 1,000 | 2.15 | % | 1,000 | ||||||||
2.9% notes due 2022 | 2.97 | % | 3,100 | 2.97 | % | 3,100 | ||||||||
4.4% notes due 2042 | 4.46 | % | 2,600 | 4.46 | % | 2,600 | ||||||||
Other | — | 115 | — | 98 | ||||||||||
Fair value hedges | — | (180 | ) | — | (432 | ) | ||||||||
Unamortized bond discounts | — | (49 | ) | — | (56 | ) | ||||||||
| | | | | | | | | | | | | | |
Total long-term debt and lease obligations | 14,586 | 14,310 | ||||||||||||
Current portion | 4,021 | 18 | ||||||||||||
| | | | | | | | | | | | | | |
Noncurrent portion | $ | 10,565 | $ | 14,292 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(a) | Excludes the effect of any related interest rate swaps. | |||||||||||||
Summary of future minimum lease payments under non-cancelable operating leases, debt maturities and future minimum lease payments for capital lease obligations | ||||||||||||||
as of and for the years ended December 31 (in millions) | Operating | Debt maturities | ||||||||||||
leases | and capital leases | |||||||||||||
| | | | | | | | |||||||
2015 | $ | 114 | $ | 4,021 | ||||||||||
2016 | 103 | 19 | ||||||||||||
2017 | 92 | 4,018 | ||||||||||||
2018 | 81 | 1,014 | ||||||||||||
2019 | 74 | 6 | ||||||||||||
Thereafter | 98 | 5,737 | ||||||||||||
| | | | | | | | |||||||
Total obligations and commitments | 562 | 14,815 | ||||||||||||
Fair value hedges and unamortized bond discounts | n/a | (229 | ) | |||||||||||
| | | | | | | | |||||||
Total debt and lease obligations | $ | 562 | $ | 14,586 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measures (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Financial Instruments and Fair Value Measures | |||||||||||||||||||||
Schedule of amounts and balance sheet location of derivatives | |||||||||||||||||||||
Fair value—Derivatives in asset position | Fair value—Derivatives in liability | ||||||||||||||||||||
position | |||||||||||||||||||||
(in millions) | 2014 | 2013 | Balance sheet caption | 2014 | 2013 | Balance sheet caption | |||||||||||||||
| | | | | | | | | | | | | | | | | |||||
Interest rate swaps designated as fair value hedges | $ | — | $ | — | n/a | $ | 180 | $ | 432 | Long-term liabilities | |||||||||||
Foreign currency forward exchange contracts— | |||||||||||||||||||||
Hedging instruments | 141 | — | Prepaid expenses and other | — | 61 | Accounts payable and accrued liabilities | |||||||||||||||
Others not designated as hedges | 70 | 17 | Prepaid expenses and other | 63 | 12 | Accounts payable and accrued liabilities | |||||||||||||||
| | | | | | | | | | | | | | | | | |||||
Total | $ | 211 | $ | 17 | $ | 243 | $ | 505 | |||||||||||||
| | | | | | | | | | | | | | | | | |||||
Schedule of derivative activity and amounts and location of income (expense) and gain (loss) reclassified into net earnings | |||||||||||||||||||||
Gain (loss) | (Expense) income | ||||||||||||||||||||
recognized | and (loss) gain | ||||||||||||||||||||
in other | reclassified | ||||||||||||||||||||
comprehensive | into income | ||||||||||||||||||||
(loss) income | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | Income statement caption | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
Foreign currency forward exchange contracts— | |||||||||||||||||||||
Designated as cash flow hedges | $ | 193 | $ | (77 | ) | $ | (11 | ) | $ | (79 | ) | $ | — | $ | 24 | Cost of products sold | |||||
Not designated as hedges | n/a | n/a | n/a | (523 | ) | 81 | (23 | ) | Net foreign exchange (loss) gain | ||||||||||||
Interest rate swaps designated as fair value hedges | n/a | n/a | n/a | 252 | (351 | ) | (81 | ) | Interest expense (income), net | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
Summary of the bases used to measure certain assets and liabilities that are carried at fair value on a recurring basis in the condensed consolidated balance sheets | |||||||||||||||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Balance at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2014 | markets for | observable | Inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Cash and equivalents | $ | 8,348 | $ | 1,214 | $ | 7,134 | $ | — | |||||||||||||
Time deposits | 9 | — | 9 | — | |||||||||||||||||
Equity securities | 13 | 13 | — | — | |||||||||||||||||
Foreign currency contracts | 211 | — | 211 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 8,581 | $ | 1,227 | $ | 7,354 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Interest rate hedges | $ | 180 | $ | — | $ | 180 | $ | — | |||||||||||||
Foreign currency contracts | 63 | — | 63 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 243 | $ | — | $ | 243 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Balance at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2013 | markets for | observable | Inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Cash and equivalents | $ | 9,595 | $ | 684 | $ | 8,911 | $ | — | |||||||||||||
Time deposits | 300 | — | 300 | — | |||||||||||||||||
Equity securities | 10 | 10 | — | — | |||||||||||||||||
Foreign currency contracts | 17 | — | 17 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 9,922 | $ | 694 | $ | 9,228 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Interest rate hedges | $ | 432 | $ | — | $ | 432 | $ | — | |||||||||||||
Foreign currency contracts | 73 | — | 73 | — | |||||||||||||||||
Contingent consideration | 165 | — | — | 165 | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 670 | $ | — | $ | 505 | $ | 165 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Schedule of reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and investments | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
| | | | | |||||||||||||||||
Fair value as of December 31, 2012 | $ | 251 | |||||||||||||||||||
Payments | (131 | ) | |||||||||||||||||||
Additions | 28 | ||||||||||||||||||||
Change in fair value recognized in earnings | 17 | ||||||||||||||||||||
| | | | | |||||||||||||||||
Fair value as of December 31, 2013 | 165 | ||||||||||||||||||||
Payments | (164 | ) | |||||||||||||||||||
Other | — | ||||||||||||||||||||
Change in fair value recognized in earnings | (1 | ) | |||||||||||||||||||
| | | | | |||||||||||||||||
Fair value as of December 31, 2014 | $ | — | |||||||||||||||||||
| | | | | |||||||||||||||||
| | | | | |||||||||||||||||
Schedule of the carrying values and fair values of certain financial instruments | |||||||||||||||||||||
Book values | Approximate | ||||||||||||||||||||
fair values | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Investments | $ | 95 | $ | 108 | $ | 145 | $ | 129 | |||||||||||||
Liabilities | |||||||||||||||||||||
Short-term borrowings | 425 | 413 | 425 | 413 | |||||||||||||||||
Current portion of long-term debt and lease obligations | 4,021 | 18 | 4,033 | 18 | |||||||||||||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,745 | 14,724 | 10,830 | 14,493 | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Schedule of fair value of financial instruments by fair value basis | |||||||||||||||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Fair value at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2014 | markets for | observable | inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Investments | $ | 145 | $ | 68 | $ | 13 | $ | 64 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 145 | $ | 68 | $ | 13 | $ | 64 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Short-term borrowings | $ | 425 | $ | — | $ | 425 | $ | — | |||||||||||||
Current portion of long-term debt and lease obligations | 4,033 | 4,012 | 21 | — | |||||||||||||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,830 | 10,737 | 93 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 15,288 | $ | 14,749 | $ | 539 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Basis of fair value measurement | |||||||||||||||||||||
(in millions) | Fair value at | Quoted prices | Significant | Significant | |||||||||||||||||
December 31, | in active | other | unobservable | ||||||||||||||||||
2013 | markets for | observable | inputs | ||||||||||||||||||
identical | inputs | (Level 3) | |||||||||||||||||||
assets | (Level 2) | ||||||||||||||||||||
(Level 1) | |||||||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Assets | |||||||||||||||||||||
Investments | $ | 129 | $ | 39 | $ | 30 | $ | 60 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
Total assets | $ | 129 | $ | 39 | $ | 30 | $ | 60 | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
Liabilities | |||||||||||||||||||||
Short-term borrowings | $ | 413 | $ | — | $ | 413 | $ | — | |||||||||||||
Current portion of long-term debt and lease obligations | 18 | — | 18 | — | |||||||||||||||||
Long-term debt and lease obligations, excluding fair value hedges | 14,493 | 14,413 | 80 | — | |||||||||||||||||
| | | | | | | | | | | | | | ||||||||
Total liabilities | $ | 14,924 | $ | 14,413 | $ | 511 | $ | — | |||||||||||||
| | | | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | ||||||||
PostEmployment_Benefits_Tables
Post-Employment Benefits (Tables) (AbbVie sponsored plans) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
AbbVie sponsored plans | ||||||||||||||
Employee Benefit Plans | ||||||||||||||
Summary of net periodic benefit cost relating to the company's defined benefit and other post-employment plans | ||||||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Defined benefit plans | ||||||||||||||
Service cost | $ | 173 | $ | 184 | $ | 21 | ||||||||
Interest cost | 217 | 196 | 38 | |||||||||||
Expected return on plan assets | (302 | ) | (259 | ) | (29 | ) | ||||||||
Amortization of actuarial losses and prior service costs | 68 | 114 | 7 | |||||||||||
| | | | | | | | | | | ||||
Net periodic pension benefit cost | $ | 156 | $ | 235 | $ | 37 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Other post-employment plans | ||||||||||||||
Service cost | $ | 22 | $ | 23 | $ | — | ||||||||
Interest cost | 22 | 19 | — | |||||||||||
Amortization of actuarial gain and prior service costs | (2 | ) | (1 | ) | — | |||||||||
| | | | | | | | | | | ||||
Net periodic OPEB cost | $ | 42 | $ | 41 | $ | — | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Schedule of benefit plan information | ||||||||||||||
Defined | Other | |||||||||||||
benefit plans | post-employment | |||||||||||||
plans | ||||||||||||||
as of and for the years ended December 31 (in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
| | | | | | | | | | | | | | |
Projected benefit obligations | ||||||||||||||
Beginning of period | $ | 4,484 | $ | 1,669 | $ | 403 | $ | 231 | ||||||
Service cost | 173 | 184 | 22 | 23 | ||||||||||
Interest cost | 217 | 196 | 22 | 19 | ||||||||||
Employee contributions | 1 | 1 | — | — | ||||||||||
Plan amendments | 1 | (1 | ) | (13 | ) | — | ||||||||
Assumption of plan liabilities | — | 3,009 | — | 209 | ||||||||||
Removal of plans | — | — | — | (12 | ) | |||||||||
Actuarial (gain) loss | 1,108 | (455 | ) | 111 | (55 | ) | ||||||||
Benefits paid | (163 | ) | (146 | ) | (8 | ) | (12 | ) | ||||||
Other, primarily foreign currency translation loss | (140 | ) | 27 | 1 | — | |||||||||
| | | | | | | | | | | | | | |
End of period | $ | 5,681 | $ | 4,484 | $ | 538 | $ | 403 | ||||||
| | | | | | | | | | | | | | |
Fair value of plan assets | ||||||||||||||
Beginning of period | $ | 3,666 | $ | 898 | $ | — | $ | — | ||||||
Actual return on plan assets | 282 | 491 | — | — | ||||||||||
Company contributions | 430 | 198 | 8 | 12 | ||||||||||
Employee contributions | 1 | 1 | — | — | ||||||||||
Assumption of plan assets | — | 2,221 | — | — | ||||||||||
Benefits paid | (163 | ) | (146 | ) | (8 | ) | (12 | ) | ||||||
Other, primarily foreign currency translation gain | (43 | ) | 3 | — | — | |||||||||
| | | | | | | | | | | | | | |
End of period | $ | 4,173 | $ | 3,666 | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | |
Funded status at December 31 | $ | (1,508 | ) | $ | (818 | ) | $ | (538 | ) | $ | (403 | ) | ||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Amounts recognized in consolidated balance sheets | ||||||||||||||
Other assets | $ | 210 | $ | 442 | $ | — | $ | — | ||||||
Current liabilities | (26 | ) | (27 | ) | (10 | ) | (8 | ) | ||||||
Long-term liabilities | (1,692 | ) | (1,233 | ) | (528 | ) | (395 | ) | ||||||
| | | | | | | | | | | | | | |
Net liability at December 31 | $ | (1,508 | ) | $ | (818 | ) | $ | (538 | ) | $ | (403 | ) | ||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Actuarial losses, net | $ | 2,216 | $ | 1,194 | $ | 181 | $ | 74 | ||||||
Prior service cost | 19 | 22 | (53 | ) | (47 | ) | ||||||||
| | | | | | | | | | | | | | |
AOCI at December 31 | $ | 2,235 | $ | 1,216 | $ | 128 | $ | 27 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Summary of pretax gains and losses included in OCI | ||||||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Defined benefit plans | ||||||||||||||
Actuarial (gain) loss | $ | 1,127 | $ | (715 | ) | $ | 98 | |||||||
Prior service cost | 1 | 15 | 9 | |||||||||||
Amortization of actuarial losses and prior service costs | (68 | ) | (114 | ) | (7 | ) | ||||||||
Foreign exchange loss | (41 | ) | 2 | 5 | ||||||||||
| | | | | | | | | | | ||||
Total pretax (gain) loss recognized in OCI | $ | 1,019 | $ | (812 | ) | $ | 105 | |||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Other post-employment plans | ||||||||||||||
Actuarial (gain) loss | $ | 111 | $ | (42 | ) | $ | 69 | |||||||
Prior service cost | (13 | ) | (53 | ) | — | |||||||||
Amortization of actuarial losses and prior service costs | 3 | — | — | |||||||||||
| | | | | | | | | | | ||||
Total pretax (gain) loss recognized in OCI | $ | 101 | $ | (95 | ) | $ | 69 | |||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Schedule of weighted-average assumptions used in determining benefit obligations at the measurement date | ||||||||||||||
2014 | 2013 | |||||||||||||
| | | | | | | | |||||||
Defined benefit plans | ||||||||||||||
Discount rate | 3.9 | % | 4.9 | % | ||||||||||
Rate of compensation increases | 4.4 | % | 5.0 | % | ||||||||||
Other post-employment plans | ||||||||||||||
Discount rate | 4.5 | % | 5.3 | % | ||||||||||
Rate of compensation increases | — | 6.0 | % | |||||||||||
| | | | | | | | |||||||
Schedule of weighted-average assumptions used in determining net periodic benefit cost | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
| | | | | | | | | | | ||||
Defined benefit plans | ||||||||||||||
Discount rate | 4.9 | % | 4.3 | % | 5.1 | % | ||||||||
Expected long-term rate of return on plan assets | 7.9 | % | 8.2 | % | 8.5 | % | ||||||||
Expected rate of change in compensation | 5.0 | % | 5.0 | % | 4.2 | % | ||||||||
Other post-employment plans | ||||||||||||||
Discount rate | 5.3 | % | 4.5 | % | N/A | |||||||||
| | | | | | | | | | | ||||
Schedule of effects of 1% change in assumed health care cost trend rates | ||||||||||||||
One percentage | ||||||||||||||
point | ||||||||||||||
year ended December 31, 2014 (in millions) | Increase | Decrease | ||||||||||||
| | | | | | | | |||||||
Service cost and interest cost | $ | 9 | $ | (7 | ) | |||||||||
Projected benefit obligation | 121 | (92 | ) | |||||||||||
| | | | | | | | |||||||
Schedule of defined benefit pension plan assets | ||||||||||||||
Basis of fair value measurement | ||||||||||||||
(in millions) | Balance at | Quoted prices in | Significant other | Significant | ||||||||||
December 31, | active markets for | observable | unobservable | |||||||||||
2014 | identical assets | inputs | inputs | |||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
| | | | | | | | | | | | | | |
Equities | ||||||||||||||
U.S. large cap(a) | $ | 1,314 | $ | 588 | $ | 726 | $ | — | ||||||
U.S. mid cap(b) | 267 | 67 | 200 | — | ||||||||||
International(c) | 608 | 137 | 471 | — | ||||||||||
Fixed income securities | ||||||||||||||
U.S. government securities(d) | 216 | — | 216 | — | ||||||||||
Corporate debt instruments(e) | 326 | 101 | 225 | — | ||||||||||
Government Securities International | 425 | 201 | 224 | — | ||||||||||
Other | 37 | 29 | 8 | — | ||||||||||
Absolute return funds(f) | 848 | 3 | 371 | 474 | ||||||||||
Real assets | 53 | 7 | 46 | — | ||||||||||
Other(g) | 79 | 79 | — | — | ||||||||||
| | | | | | | | | | | | | | |
Fair value of plan assets | $ | 4,173 | $ | 1,212 | $ | 2,487 | $ | 474 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basis of fair value measurement | ||||||||||||||
(in millions) | Balance at | Quoted prices in | Significant other | Significant | ||||||||||
December 31, | active markets for | observable | unobservable | |||||||||||
2013 | identical assets | inputs | inputs | |||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||
| | | | | | | | | | | | | | |
Equities | ||||||||||||||
U.S. large cap(a) | $ | 1,197 | $ | 576 | $ | 621 | $ | — | ||||||
U.S. mid cap(b) | 244 | 62 | 182 | — | ||||||||||
International(c) | 614 | 225 | 389 | — | ||||||||||
Fixed income securities | ||||||||||||||
U.S. government securities(d) | 292 | 35 | 257 | — | ||||||||||
Corporate debt instruments(e) | 212 | 57 | 155 | — | ||||||||||
Government Securities International | 216 | 159 | 57 | — | ||||||||||
Other | 52 | 45 | 7 | — | ||||||||||
Absolute return funds(f) | 704 | 3 | 290 | 411 | ||||||||||
Real assets | 70 | 8 | 62 | — | ||||||||||
Other(g) | 65 | 62 | 3 | — | ||||||||||
| | | | | | | | | | | | | | |
Fair value of plan assets | $ | 3,666 | $ | 1,232 | $ | 2,023 | $ | 411 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(a) | A mix of pooled index funds and actively managed equity accounts that are benchmarked to various large cap indices. | |||||||||||||
(b) | A mix of pooled index funds and actively managed equity accounts that are benchmarked to various mid cap indices. | |||||||||||||
(c) | A mix of pooled index funds and actively managed equity accounts that are benchmarked to various non-US equity indices in both developed and emerging markets. | |||||||||||||
(d) | Securities held by actively managed accounts, pooled index funds, and mutual funds. | |||||||||||||
(e) | Securities held by actively managed accounts, pooled index funds, and mutual funds. | |||||||||||||
(f) | Funds having global mandates with the flexibility to allocate capital broadly across a wide range of asset classes and strategies, including but not limited to equities, fixed income, commodities, financial futures, currencies, and other securities, with objectives to outperform agreed upon benchmarks of specific return and volatility targets. | |||||||||||||
(g) | Investments in cash and cash equivalents. | |||||||||||||
Summary of change in the value of plan assets that are measured using significant unobservable inputs (Level 3) | ||||||||||||||
(in millions) | 2014 | 2013 | ||||||||||||
| | | | | | | | |||||||
Balance as of January 1 | $ | 411 | $ | 33 | ||||||||||
Actual return on plan assets on hand at year end | 21 | 4 | ||||||||||||
Assumption of level 3 assets | — | 372 | ||||||||||||
Purchases, sales and settlements, net | 42 | 2 | ||||||||||||
| | | | | | | | |||||||
Balance as of December 31 | $ | 474 | $ | 411 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Schedule of expected pension and other post-employment payments | ||||||||||||||
(in millions) | Defined | Other | ||||||||||||
benefit plans | post-employment | |||||||||||||
plans | ||||||||||||||
| | | | | | | | |||||||
2015 | $ | 161 | $ | 10 | ||||||||||
2016 | 170 | 12 | ||||||||||||
2017 | 180 | 14 | ||||||||||||
2018 | 192 | 15 | ||||||||||||
2019 | 204 | 17 | ||||||||||||
2020 to 2024 | 1,239 | 115 | ||||||||||||
| | | | | | | | |||||||
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity | |||||||||||||||||
Summary of AbbVie stock option activity for both AbbVie and Abbott employees | (options in thousands, aggregate intrinsic value in millions) | Options | Weighted- | Weighted- | Aggregate | ||||||||||||
average | Average | intrinsic value | |||||||||||||||
exercise price | remaining | ||||||||||||||||
life (in years) | |||||||||||||||||
| | | | | | | | | | | | | | ||||
Outstanding at December 31, 2013 | 35,994 | $ | 27.48 | 3.6 | $ | 912 | |||||||||||
Granted | 1,134 | 51.53 | |||||||||||||||
Exercised | (8,765 | ) | 27.18 | ||||||||||||||
Lapsed | (83 | ) | 25.97 | ||||||||||||||
| | | | | | | | | | | | | | ||||
Outstanding at December 31, 2014 | 28,280 | $ | 28.53 | 3.3 | $ | 1,044 | |||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Exercisable at December 31, 2014 | 25,497 | $ | 27.2 | 2.8 | $ | 975 | |||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Summary of AbbVie RSA and RSU activity (including performance-based awards) for both AbbVie and Abbott employees | |||||||||||||||||
(share units in thousands) | Share units | Weighted-average | |||||||||||||||
grant date fair value | |||||||||||||||||
| | | | | | | | ||||||||||
Outstanding at December 31, 2013 | 14,910 | $ | 32.07 | ||||||||||||||
Granted | 5,112 | 51.55 | |||||||||||||||
Vested | (6,638 | ) | 29.43 | ||||||||||||||
Lapsed | (569 | ) | 38.48 | ||||||||||||||
| | | | | | | | ||||||||||
Outstanding at December 31, 2014 | 12,815 | $ | 40.98 | ||||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Summary of changes in balances of each component of accumulated other comprehensive loss | |||||||||||||||||
(in millions) (brackets denote losses) | Foreign | Pension | Unrealized | Hedging | Total | ||||||||||||
currency | and post- | gains | activities | ||||||||||||||
translation | employment | (losses) on | |||||||||||||||
adjustments | benefits | marketable | |||||||||||||||
equity | |||||||||||||||||
securities | |||||||||||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2011 | $ | 8 | $ | (65 | ) | $ | 26 | $ | 6 | $ | (25 | ) | |||||
Other comprehensive income before reclassifications | 173 | (157 | ) | (25 | ) | (9 | ) | $ | (18 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | — | 7 | — | (18 | ) | $ | (11 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Net current-period other comprehensive income | 173 | (150 | ) | (25 | ) | (27 | ) | $ | (29 | ) | |||||||
| | | | | | | | | | | | | | | | | |
Separation-related adjustments | — | (296 | ) | — | — | $ | (296 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2012 | $ | 181 | $ | (511 | ) | $ | 1 | $ | (21 | ) | $ | (350 | ) | ||||
| | | | | | | | | | | | | | | | | |
Other comprehensive income before reclassifications | 48 | 519 | 1 | (77 | ) | $ | 491 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 79 | — | — | $ | 79 | |||||||||||
| | | | | | | | | | | | | | | | | |
Net current-period other comprehensive income | 48 | 598 | 1 | (77 | ) | $ | 570 | ||||||||||
| | | | | | | | | | | | | | | | | |
Separation-related adjustments | 241 | (914 | ) | — | 11 | $ | (662 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2013 | $ | 470 | $ | (827 | ) | $ | 2 | $ | (87 | ) | $ | (442 | ) | ||||
| | | | | | | | | | | | | | | | | |
Other comprehensive income before reclassifications | (1,073 | ) | (827 | ) | 1 | 187 | $ | (1,712 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income | — | 46 | — | 77 | $ | 123 | |||||||||||
| | | | | | | | | | | | | | | | | |
Net current-period other comprehensive (loss) income | (1,073 | ) | (781 | ) | 1 | 264 | $ | (1,589 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Balance as of December 31, 2014 | $ | (603 | ) | $ | (1,608 | ) | $ | 3 | $ | 177 | $ | (2,031 | ) | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive loss | |||||||||||||||||
years ended December 31 (in millions) | 2014 | 2013 | |||||||||||||||
| | | | | | | | ||||||||||
Pension and post-employee benefits | |||||||||||||||||
Amortization of actuarial losses and other | $ | 66 | $ | 114 | |||||||||||||
Less tax expense | (20 | ) | (35 | ) | |||||||||||||
| | | | | | | | ||||||||||
Total reclassification, net of tax | $ | 46 | $ | 79 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Hedging activities | |||||||||||||||||
Gains (losses) on designated cash flow hedges | $ | (79 | ) | $ | — | ||||||||||||
Less tax expense | 2 | — | |||||||||||||||
| | | | | | | | ||||||||||
Total reclassification, net of tax | $ | (77 | ) | $ | — | ||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of earnings before income taxes | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Domestic | $ | (3,245 | ) | $ | (581 | ) | $ | 625 | |||
Foreign | 5,614 | 5,913 | 5,100 | ||||||||
| | | | | | | | | | | |
Total earnings before income taxes | $ | 2,369 | $ | 5,332 | $ | 5,725 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of income taxes | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Current | |||||||||||
Domestic | $ | 634 | $ | 226 | $ | 94 | |||||
Foreign | 341 | 354 | 252 | ||||||||
| | | | | | | | | | | |
Total current taxes | $ | 975 | $ | 580 | $ | 346 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred | |||||||||||
Domestic | $ | (301 | ) | $ | 678 | $ | 89 | ||||
Foreign | (79 | ) | (54 | ) | 15 | ||||||
| | | | | | | | | | | |
Total deferred taxes | (380 | ) | 624 | 104 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Total income taxes | $ | 595 | $ | 1,204 | $ | 450 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of effective tax rate reconciliation | |||||||||||
years ended December 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Statutory tax rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal benefit | — | 0.3 | 0.1 | ||||||||
Effect of foreign operations | (11.3 | ) | (11.5 | ) | (23.5 | ) | |||||
U.S. tax credits | (8.9 | ) | (2.7 | ) | (1.5 | ) | |||||
Branded prescription drug fee | 3.7 | 0.4 | 0.3 | ||||||||
Valuation allowances | 3.6 | 0.1 | — | ||||||||
Resolution of uncertain tax positions | — | — | (3.4 | ) | |||||||
Non-deductible litigation loss | — | — | 0.6 | ||||||||
All other, net | 3 | 1 | 0.3 | ||||||||
| | | | | | | | | | | |
Effective tax rate | 25.1 | % | 22.6 | % | 7.9 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of deferred tax assets and liabilities | |||||||||||
as of December 31 (in millions) | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Deferred tax assets | |||||||||||
Compensation and employee benefits | $ | 627 | $ | 279 | |||||||
Accruals and reserves | 376 | 252 | |||||||||
Chargebacks and rebates | 297 | 333 | |||||||||
Deferred revenue | 382 | 348 | |||||||||
Depreciation | 53 | 64 | |||||||||
State income taxes | 62 | 67 | |||||||||
Other | 230 | 122 | |||||||||
Net operating losses and other credit carryforwards | 125 | 115 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 2,152 | 1,580 | |||||||||
Valuation allowances | (172 | ) | (43 | ) | |||||||
| | | | | | | | ||||
Total net deferred tax assets | $ | 1,980 | $ | 1,537 | |||||||
| | | | | | | | ||||
Deferred tax liabilities | |||||||||||
Excess of book basis over tax basis of intangible assets | $ | (331 | ) | $ | (508 | ) | |||||
Repatriation of foreign earnings | (326 | ) | (606 | ) | |||||||
| | | | | | | | ||||
Total deferred tax liabilities | $ | (657 | ) | $ | (1,114 | ) | |||||
| | | | | | | | ||||
Net deferred tax asset | $ | 1,323 | $ | 423 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of unrecognized tax benefits | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Balance as of January 1 | $ | 247 | $ | 1,140 | $ | 1,039 | |||||
Increase due to current year tax positions | 115 | 195 | 370 | ||||||||
Increase due to prior year tax positions | 67 | — | 1 | ||||||||
Decrease due to prior year tax positions | (6 | ) | — | (220 | ) | ||||||
Settlements | — | — | (50 | ) | |||||||
Lapse of statutes of limitations | (2 | ) | — | — | |||||||
Separation-related adjustments | — | (1,088 | ) | — | |||||||
| | | | | | | | | | | |
Balance as of December 31 | $ | 421 | $ | 247 | $ | 1,140 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Segment_and_Geographic_Area_In1
Segment and Geographic Area Information (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Segment Information | |||||||||||
Schedule of consolidated financial information by segment | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
HUMIRA | $ | 12,543 | $ | 10,659 | $ | 9,265 | |||||
AndroGel | 934 | 1,035 | 1,152 | ||||||||
Kaletra | 870 | 962 | 1,013 | ||||||||
Synagis | 835 | 827 | 825 | ||||||||
Lupron | 778 | 785 | 800 | ||||||||
Synthroid | 709 | 622 | 551 | ||||||||
Sevoflurane | 550 | 568 | 602 | ||||||||
Creon | 516 | 412 | 353 | ||||||||
Dyslipidemia products | 328 | 1,076 | 2,145 | ||||||||
Duodopa | 220 | 178 | 149 | ||||||||
VIEKIRA | 48 | — | — | ||||||||
All other | 1,629 | 1,666 | 1,525 | ||||||||
| | | | | | | | | | | |
Net sales | $ | 19,960 | $ | 18,790 | $ | 18,380 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of net sales to external customers, based on the country that sold the product | |||||||||||
years ended December 31 (in millions) | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
United States | $ | 10,845 | $ | 10,181 | $ | 10,435 | |||||
Germany | 1,035 | 911 | 756 | ||||||||
The Netherlands | 969 | 858 | 776 | ||||||||
United Kingdom | 722 | 606 | 552 | ||||||||
France | 584 | 540 | 500 | ||||||||
Japan | 581 | 625 | 718 | ||||||||
Canada | 551 | 538 | 500 | ||||||||
Spain | 534 | 543 | 525 | ||||||||
Brazil | 435 | 439 | 434 | ||||||||
Italy | 432 | 404 | 408 | ||||||||
All other countries | 3,272 | 3,145 | 2,776 | ||||||||
| | | | | | | | | | | |
Net sales | $ | 19,960 | $ | 18,790 | $ | 18,380 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Quarterly_Financial_Data_unaud1
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Quarterly Financial Data (unaudited) | ||||||||||
Schedule of quarterly financial data (unaudited) | ||||||||||
(in millions except per share data) | 2014 | 2013 | ||||||||
| | | | | | | | | | |
First Quarter | ||||||||||
Net sales | $ | 4,563 | $ | 4,329 | ||||||
Gross margin | 3,463 | 3,176 | ||||||||
Net earnings | 980 | 968 | ||||||||
Basic earnings per share | 0.61 | 0.61 | ||||||||
Diluted earnings per share | 0.61 | 0.6 | ||||||||
Cash dividends declared per common share | 0.42 | 0.8 | (a) | |||||||
Second Quarter | ||||||||||
Net sales | $ | 4,926 | $ | 4,692 | ||||||
Gross margin | 3,813 | 3,638 | ||||||||
Net earnings | 1,098 | 1,068 | ||||||||
Basic earnings per share | 0.69 | 0.67 | ||||||||
Diluted earnings per share | 0.68 | 0.66 | ||||||||
Cash dividends declared per common share | 0.42 | 0.4 | ||||||||
Third Quarter | ||||||||||
Net sales | $ | 5,019 | $ | 4,658 | ||||||
Gross margin | 3,925 | 3,566 | ||||||||
Net earnings | 506 | 964 | ||||||||
Basic earnings per share | 0.32 | 0.6 | ||||||||
Diluted earnings per share | 0.31 | 0.6 | ||||||||
Cash dividends declared per common share | 0.42 | 0.4 | ||||||||
Fourth Quarter | ||||||||||
Net sales | $ | 5,452 | $ | 5,111 | ||||||
Gross margin | 4,333 | 3,829 | ||||||||
Net (loss) earnings | (b) | (810 | ) | 1,128 | ||||||
Basic (loss) earnings per share | (c) | (0.51 | ) | 0.7 | ||||||
Diluted (loss) earnings per share | (c) | (0.51 | ) | 0.7 | ||||||
Cash dividends declared per common share | 0.49 | 0.4 | ||||||||
| | | | | | | | | | |
(a) | On January 4, 2013, a cash dividend of $0.40 per share of common stock was declared from pre-separation earnings and was recorded as a reduction of additional paid-in capital. Refer to Note 12 for additional information regarding cash dividends declared in 2013. | |||||||||
(b) | Results for the fourth quarter of 2014 include transaction and financing-related and other costs incurred in connection with the terminated proposed combination with Shire, a $750 million after-tax charge related to a research and development collaboration agreement with Calico, and a $173 million after-tax charge as a result of entering into a global collaboration with Infinity. Refer to Notes 4 and 6 for further information relating to the termination of the proposed combination with Shire and the collaborations with Calico and Infinity, respectively. | |||||||||
(c) | Basic loss per share for the fourth quarter of 2014 was calculated under the treasury-stock method as it was more dilutive. Approximately 36 million common shares were excluded from the computation of diluted (loss) per share assuming dilution because the effect would have been anti-dilutive. | |||||||||
Background_and_Basis_of_Presen1
Background and Basis of Presentation (Details) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | ||
Jan. 02, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2012 | |
customer | |||||
Background and Basis of Presentation | |||||
Number of wholesalers | 3 | ||||
Common stock distribution ratio | 1 | ||||
Separation-related adjustments recorded in stockholders' equity | $1,271,000,000 | ||||
Separation-related expenses | 445,000,000 | 254,000,000 | 288,000,000 | ||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | |||||
Commitments | 14,700,000,000 | ||||
Accounts receivable | 3,735,000,000 | 3,854,000,000 | |||
Accounts payable and accrued liabilities | 6,954,000,000 | 6,448,000,000 | |||
Minimum | |||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | |||||
Maturity period | 3 years | ||||
Maximum | |||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | |||||
Maturity period | 30 years | ||||
Separation agreement | |||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | |||||
Trade accounts receivable | 62,000,000 | ||||
Inventories | 190,000,000 | ||||
Other assets | 93,000,000 | ||||
Accounts payable and other accrued liabilities | 212,000,000 | ||||
AbbVie sponsored plans | |||||
Background and Basis of Presentation | |||||
Percentage of outstanding common stock distributed to Abbott Laboratories' shareholders | 100.00% | ||||
AbbVie sponsored plans | Transition services agreement | |||||
Background and Basis of Presentation | |||||
Term by which the agreement can be extended | 1 year | ||||
Abbott | |||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | |||||
Accounts receivable | 526,000,000 | 738,000,000 | |||
Accounts payable and accrued liabilities | 536,000,000 | 876,000,000 | |||
Abbott | Transition services agreement | Maximum | |||||
Background and Basis of Presentation | |||||
Term for which transition services may be provided | 24 months | ||||
Abbott | Separation agreement | |||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | |||||
Net sales | 282,000,000 | 738,000,000 | |||
Trade accounts receivable | 27,000,000 | ||||
Inventories | 16,000,000 | ||||
Other assets | 33,000,000 | ||||
Accounts payable and other accrued liabilities | 50,000,000 | ||||
Expenses allocated | $838,000,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Advertising | |||
Advertising expenses | $665 | $626 | $506 |
Pension and Post-Employment Benefits | |||
Amortization period of differences between the expected long-term return on plan assets and the actual return | 5 years | ||
AbbVie sponsored plans | |||
Post-Employment Benefits | |||
Defined benefit pension and other post-employment plans assets recognized | $0 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accounts Receivable | ||
Allowance for accounts receivable | $74 | $88 |
Inventories, Net | ||
Finished goods | 341 | 485 |
Work-in-process | 629 | 404 |
Materials | 154 | 261 |
Inventories, net | $1,124 | $1,150 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property and Equipment | ||||
Property and equipment, gross | $7,105 | $6,909 | ||
Less accumulated depreciation | -4,620 | -4,611 | ||
Property and equipment, net | 2,485 | 2,298 | ||
Depreciation expense | 383 | 388 | 525 | |
Goodwill and Intangible Assets | ||||
Impairment charges | 37 | 37 | 0 | 13 |
Land | ||||
Property and Equipment | ||||
Property and equipment, gross | 48 | 50 | ||
Building | ||||
Property and Equipment | ||||
Property and equipment, gross | 1,228 | 1,263 | ||
Building | Minimum | ||||
Property and Equipment | ||||
Estimated useful lives | 10 years | |||
Building | Maximum | ||||
Property and Equipment | ||||
Estimated useful lives | 50 years | |||
Equipment | ||||
Property and Equipment | ||||
Property and equipment, gross | 5,324 | 5,214 | ||
Equipment | Minimum | ||||
Property and Equipment | ||||
Estimated useful lives | 5 years | |||
Amortization Period | 3 years | |||
Equipment | Maximum | ||||
Property and Equipment | ||||
Estimated useful lives | 20 years | |||
Amortization Period | 10 years | |||
Construction in progress | ||||
Property and Equipment | ||||
Property and equipment, gross | $505 | $382 |
Supplemental_Financial_Informa2
Supplemental Financial Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Expense, net | |||
Interest expense | $429 | $299 | $104 |
Interest and dividend income | -38 | -21 | -20 |
Interest expense, net | 391 | 278 | 84 |
Prepaid Expenses and Other | |||
Prepaid Expense and Other Assets, Total | 1,403 | 1,234 | |
Accounts Payable and Accrued Liabilities | |||
Sales rebates | 1,384 | 1,401 | |
Accounts payable | 881 | 933 | |
Due to Abbott Laboratories | 536 | 876 | |
Dividends payable | 791 | 643 | |
Salaries, wages and commissions | 623 | 621 | |
Royalty license arrangements | 821 | 443 | |
Other | 1,918 | 1,531 | |
Accounts payable and accrued liabilities | 6,954 | 6,448 | |
Long-Term Liabilities | |||
Deferred income taxes | 630 | 570 | |
Pension and other post-employment benefits | 2,220 | 1,628 | |
Other | 990 | 1,337 | |
Long-term liabilities | 3,840 | 3,535 | |
Other (income) expense, net | |||
Other (Income) Expense | |||
Income from resolution of contractual agreement | $34 |
Termination_of_Combination_wit
Termination of Combination with Shire (Details) (USD $) | 1 Months Ended | 12 Months Ended | 3 Months Ended |
Oct. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | |
Shire Plc Member | |||
Acquisition-related and financing-related costs | $1,800,000,000 | ||
Break fee | 1,600,000,000 | ||
Shire Plc Member | Selling, general and administrative expense | |||
Acquisition-related and financing-related costs | 1,700,000,000 | ||
Shire Plc Member | Interest expense (income), net | |||
Acquisition-related and financing-related costs | 141,000,000 | ||
Shire Plc Member | Foreign currency forward exchange contracts | |||
Foreign exchange loss associated with forward contracts | 666,000,000 | 490,000,000 | |
Subsequent event | Foreign currency forward exchange contracts | |||
Foreign exchange loss associated with forward contracts | $170,000,000 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Anti-dilutive securities excluded from the computation of earnings per common share | |||
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 36,000,000 | ||
Earnings allocable to participating securities (in dollars) | $9 | $26 | |
Basic and diluted average shares outstanding | 1,577,000,000 | ||
Number of equity awards outstanding prior to the separation | 0 | ||
RSAs & RSUs | |||
Anti-dilutive securities excluded from the computation of earnings per common share | |||
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 4,000,000 | 5,000,000 | |
Stock-based compensation plans | |||
Anti-dilutive securities excluded from the computation of earnings per common share | |||
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 400,000 | 1,000,000 |
Acquisitions_Collaborations_an1
Acquisitions, Collaborations and Other Arrangements (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Feb. 29, 2012 | Jun. 30, 2013 | 31-May-12 | Jan. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Sep. 30, 2014 |
Acquisitions, Collaborations and Other Arrangements | |||||||||||
Cash outflows related to acquisitions, collaborations and other arrangements | $622 | $405 | $688 | ||||||||
Collaborations and Other Arrangements | |||||||||||
Acquired in-process research and development | 352 | 338 | 288 | ||||||||
Payments to collaborators for joint development and commercialization of specified products | 750 | ||||||||||
Ablynx NV | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Acquired in-process research and development | 175 | ||||||||||
Galapagos NV | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Acquired in-process research and development | 45 | 150 | |||||||||
Payments for achievement of certain milestones under an agreement | 1,300 | 1,300 | |||||||||
Alvine Pharmaceuticals, Inc. | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Payments for achievement of certain milestones under an agreement | 275 | 275 | |||||||||
Alvine Pharmaceuticals, Inc. | IPR&D | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Initial upfront payment | 70 | ||||||||||
Other arrangements | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Acquired in-process research and development | 77 | 48 | |||||||||
Action Pharma A/S | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Acquired in-process research and development | 110 | ||||||||||
Calico Life Sciences LLC | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Payments to collaborators for joint development and commercialization of specified products | 750 | 750 | |||||||||
Amount paid during the period for collaborations | 250 | 500 | |||||||||
Responsible term for research and early development of collaborations | 5 years | ||||||||||
Period of continuance for collaboration projects through Phase 2a | 10 years | ||||||||||
Infinity Pharmaceuticals Inc Member | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Initial upfront payment | 275 | ||||||||||
Payments to collaborators for joint development and commercialization of specified products | 173 | ||||||||||
Maximum | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Payments for achievement of certain milestones under an agreement | 966 | 894 | 966 | ||||||||
Maximum | Ablynx NV | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Payments for achievement of certain milestones under an agreement | 665 | 665 | |||||||||
Maximum | Galapagos NV | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Payments for achievement of certain milestones under an agreement | 360 | 360 | |||||||||
Maximum | Infinity Pharmaceuticals Inc Member | |||||||||||
Collaborations and Other Arrangements | |||||||||||
Payments for achievement of certain milestones under an agreement | 530 | $530 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill | ||||
Currency translation and other adjustments | $25 | |||
Carrying amount of goodwill | 5,862 | 6,277 | ||
Accumulated goodwill impairment losses | 0 | |||
Definite-lived intangible assets | ||||
Gross carrying amount | 5,643 | 5,738 | ||
Accumulated amortization | -4,575 | -4,295 | ||
Net carrying amount | 1,068 | 1,443 | ||
Indefinite-lived research and development | 445 | 447 | ||
Net carrying amount - Indefinite-lived research and development | 445 | 447 | ||
Total intangible assets gross carrying amount | 6,088 | 6,185 | ||
Accumulated amortization - Total intangible assets | -4,575 | -4,295 | ||
Total intangible assets | 1,513 | 1,890 | ||
Amortization of intangible assets | 403 | 509 | 625 | |
Impairment charges | 37 | 37 | 0 | 13 |
Anticipated annual amortization expense | ||||
2015 | 247 | |||
2016 | 164 | |||
2017 | 152 | |||
2018 | 145 | |||
2019 | 107 | |||
Weighted Average | ||||
Definite-lived intangible assets | ||||
Useful life | 10 years | |||
Developed product rights | ||||
Definite-lived intangible assets | ||||
Gross carrying amount | 4,546 | 4,744 | ||
Accumulated amortization | -3,706 | -3,503 | ||
Net carrying amount | 840 | 1,241 | ||
Developed product rights | Minimum | ||||
Definite-lived intangible assets | ||||
Useful life | 3 years | |||
Developed product rights | Maximum | ||||
Definite-lived intangible assets | ||||
Useful life | 16 years | |||
Developed product rights | Weighted Average | ||||
Definite-lived intangible assets | ||||
Useful life | 10 years | |||
License agreements | ||||
Definite-lived intangible assets | ||||
Acquisition of amortizable intangible assets | 80 | |||
Gross carrying amount | 1,097 | 994 | ||
Accumulated amortization | -869 | -792 | ||
Net carrying amount | $228 | $202 | ||
License agreements | Minimum | ||||
Definite-lived intangible assets | ||||
Useful life | 3 years | |||
License agreements | Maximum | ||||
Definite-lived intangible assets | ||||
Useful life | 16 years | |||
License agreements | Weighted Average | ||||
Definite-lived intangible assets | ||||
Useful life | 13 years |
Restructuring_Plans_Details
Restructuring Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restructuring Plan 2013 and Prior Years | Employee severance and contractual obligations | |||
Restructuring Plans | |||
Cash costs included in restructuring charges | $76 | ||
Restructuring Plan 2013 and Prior Years | Selling, general and administrative expense | |||
Restructuring Plans | |||
Restructuring charges | 83 | ||
Restructuring Plan 2014 and Prior Years | |||
Restructuring Plans | |||
Restructuring charges | 16 | 76 | 191 |
Restructuring Plan 2014 and Prior Years | Employee severance and contractual obligations | |||
Restructuring Plans | |||
Cash costs included in restructuring charges | 16 | ||
Restructuring Plan 2014 and Prior Years | IPR&D | |||
Restructuring Plans | |||
Restructuring charges | 183 | ||
Restructuring Plan 2014 and Prior Years | Selling, general and administrative expense | |||
Restructuring Plans | |||
Restructuring charges | $23 | $8 |
Restructuring_Plans_Details_2
Restructuring Plans (Details 2) (Restructuring Plan 2014 and Prior Years, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restructuring Plan 2014 and Prior Years | |||
Restructuring reserve activity | |||
Accrued balance beginning of the period | $191 | $233 | $149 |
Restructuring charges | 16 | 76 | 191 |
Payments and other adjustments | -85 | -118 | -107 |
Accrued balance end of the period | 122 | 191 | 233 |
Reversal of a previously recorded restructuring reserve due to the company's revaluation of a decision to exit a manufacturing facility | 23 | ||
Accelerated depreciation in restructuring charges | $69 |
Debt_Credit_Facilities_and_Com2
Debt, Credit Facilities, and Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Nov. 30, 2012 | Dec. 31, 2013 | Oct. 31, 2014 | |
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Fair value hedges | -180,000,000 | ($432,000,000) | ||
Unamortized bond discounts | -49,000,000 | -56,000,000 | ||
Total long-term debt and lease obligations | 14,586,000,000 | 14,310,000,000 | ||
Current portion | 4,021,000,000 | 18,000,000 | ||
Noncurrent portion | 10,565,000,000 | 14,292,000,000 | ||
Revolving Credit Facility [Member] | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Maturity period | 5 years | |||
Syndicate Of Lenders [Member] | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Credit agreement outstanding | 0 | 0 | ||
Syndicate Of Lenders [Member] | Revolving Credit Facility [Member] | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Remaining borrowing capacity | 3,000,000,000 | |||
Abbott | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Notes issued | 10,200,000,000 | |||
Floating rate notes due 2015 | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 500,000,000 | 500,000,000 | ||
Weighted-average effective interest rate (as a percent) | 1.09% | 1.14% | ||
1.2% notes due 2015 | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 3,500,000,000 | 3,500,000,000 | ||
Interest rate percentage | 1.20% | |||
Weighted-average effective interest rate (as a percent) | 1.31% | 1.31% | ||
1.75% notes due 2017 | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 4,000,000,000 | 4,000,000,000 | ||
Interest rate percentage | 1.75% | |||
Weighted-average effective interest rate (as a percent) | 1.86% | 1.86% | ||
2.0% notes due 2018 | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 1,000,000,000 | 1,000,000,000 | ||
Interest rate percentage | 2.00% | |||
Weighted-average effective interest rate (as a percent) | 2.15% | 2.15% | ||
2.9% notes due 2022 | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 3,100,000,000 | 3,100,000,000 | ||
Interest rate percentage | 2.90% | |||
Weighted-average effective interest rate (as a percent) | 2.97% | 2.97% | ||
4.4% notes due 2042 | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 2,600,000,000 | 2,600,000,000 | ||
Interest rate percentage | 4.40% | |||
Weighted-average effective interest rate (as a percent) | 4.46% | 4.46% | ||
Other | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Total long-term debt and lease obligations | 115,000,000 | 98,000,000 | ||
Senior notes | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Notes issued | 14,700,000,000 | |||
Senior notes | Abbott | ||||
Debt, Credit Facilities, and Commitments and Contingencies | ||||
Notes issued | $3,000,000,000 |
Debt_Credit_Facilities_and_Com3
Debt, Credit Facilities, and Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2012 | |
Short-Term Borrowings | |||
Lease expense | $115,000,000 | $107,000,000 | |
Short-Term Borrowings | |||
Short-term borrowings | 425,000,000 | 413,000,000 | |
Operating leases | |||
2015 | 114,000,000 | ||
2016 | 103,000,000 | ||
2017 | 92,000,000 | ||
2018 | 81,000,000 | ||
2019 | 74,000,000 | ||
Thereafter | 98,000,000 | ||
Total obligations and commitments | 562,000,000 | ||
Debt maturities and capital leases | |||
2015 | 4,021,000,000 | ||
2016 | 19,000,000 | ||
2017 | 4,018,000,000 | ||
2018 | 1,014,000,000 | ||
2019 | 6,000,000 | ||
Thereafter | 5,737,000,000 | ||
Total obligations and commitments | 14,815,000,000 | ||
Fair value hedges and unamortized bond discounts | -229,000,000 | ||
Total long-term debt and lease obligations | 14,586,000,000 | 14,310,000,000 | |
Commercial Paper | |||
Short-Term Borrowings | |||
Short-term borrowings | 416,000,000 | 400,000,000,000 | 1,000,000,000 |
Weighted-average interest rate (as a percent) | 0.20% | 0.20% | |
Unsecured bank credit facility | |||
Short-Term Borrowings | |||
Borrowing capacity | $2,000,000,000 |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measures (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financial Instruments and Fair Value Measures | |||
Number of outstanding derivative instruments containing credit risk contingent features | 0 | ||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | $211,000,000 | $17,000,000 | |
Derivatives in liability position | 243,000,000 | 505,000,000 | |
Foreign currency forward exchange contracts | Shire Plc Member | |||
Derivative instruments, notional amount and fair value | |||
Foreign exchange loss associated with forward contracts | 666,000,000 | 490,000,000 | |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | 8,000,000,000 | 8,000,000,000 | |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | Long-term liabilities | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in liability position | 180,000,000 | 432,000,000 | |
Designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | 141,000,000 | ||
Designated as hedging instrument | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in liability position | 61,000,000 | ||
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | 1,400,000,000 | 1,500,000,000 | |
Approximate length of time over which accumulated gains and losses will be recognized in Cost of products sold | 12 months | ||
Not designated as hedging instrument | Foreign currency forward exchange contracts | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | 6,800,000,000 | 5,300,000,000 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | 70,000,000 | 17,000,000 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in liability position | 63,000,000 | 12,000,000 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | $16,900,000,000 |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value Measures (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest rate contracts | Fair value hedges | Interest expense (income), net | |||
Gain (loss) on derivatives | |||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | $252 | ($351) | ($81) |
Foreign currency forward exchange contracts | Not designated as hedging instrument | Net foreign exchange loss (gain) | |||
Gain (loss) on derivatives | |||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | -523 | 81 | -23 |
Foreign currency forward exchange contracts | Cash flow hedges | Cost of goods sold | |||
Gain (loss) on derivatives | |||
(Loss) gain recognized in other comprehensive (loss) income | 193 | -77 | -11 |
Income (expense) and gain (loss) reclassified into or recorded in net earnings | ($79) | $24 |
Financial_Instruments_and_Fair4
Financial Instruments and Fair Value Measures (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ||
Derivatives in asset position | $211 | $17 |
Liabilities | ||
Derivatives in liability position | 243 | 505 |
Cumulative unrealized holding gains on available-for-sale equity securities | 3 | 2 |
Fair value | ||
Assets | ||
Short term investments | 145 | 129 |
Total assets | 145 | 129 |
Liabilities | ||
Total liabilities | 15,288 | 14,924 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Short term investments | 68 | 39 |
Total assets | 68 | 39 |
Liabilities | ||
Total liabilities | 14,749 | 14,413 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Short term investments | 13 | 30 |
Total assets | 13 | 30 |
Liabilities | ||
Total liabilities | 539 | 511 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Short term investments | 64 | 60 |
Total assets | 64 | 60 |
Recurring | Fair value | ||
Assets | ||
Cash and equivalents | 8,348 | 9,595 |
Equity securities | 13 | 10 |
Derivatives in asset position | 211 | 17 |
Total assets | 8,581 | 9,922 |
Liabilities | ||
Interest rate hedges | 180 | 432 |
Derivatives in liability position | 63 | 73 |
Contingent consideration | 165 | |
Total liabilities | 243 | 670 |
Recurring | Fair value | Time deposits | ||
Assets | ||
Short term investments | 9 | 300 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Cash and equivalents | 1,214 | 684 |
Equity securities | 13 | 10 |
Total assets | 1,227 | 694 |
Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Cash and equivalents | 7,134 | 8,911 |
Derivatives in asset position | 211 | 17 |
Total assets | 7,354 | 9,228 |
Liabilities | ||
Interest rate hedges | 180 | 432 |
Derivatives in liability position | 63 | 73 |
Total liabilities | 243 | 505 |
Recurring | Significant other observable inputs (Level 2) | Time deposits | ||
Assets | ||
Short term investments | 9 | 300 |
Recurring | Significant unobservable inputs (Level 3) | ||
Liabilities | ||
Contingent consideration | 165 | |
Total liabilities | $165 |
Financial_Instruments_and_Fair5
Financial Instruments and Fair Value Measures (Details 4) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Reconciliation of the fair value measurements that use significant unobservable inputs (Level 3) | ||
Fair value at the beginning of the period | $165 | $251 |
Payments | -164 | -131 |
Additions | 28 | |
Change in fair value recognized in earnings | -1 | 17 |
Fair value at the end of the period | 165 | |
Transfers of assets or liabilities between the fair value measurement levels | ||
Transfer of assets from level 1 to level 2 | 0 | |
Transfer of assets from level 2 to level 1 | 0 | |
Transfer of liabilities from level 1 to level 2 | 0 | |
Transfer of liabilities from level 2 to level 1 | 0 | |
Contingent Consideration Arrangement [Member] | Solvay S A Pharmaceuticals [Member] | ||
Reconciliation of the fair value measurements that use significant unobservable inputs (Level 3) | ||
Payments | $137 |
Financial_Instruments_and_Fair6
Financial Instruments and Fair Value Measures (Details 5) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Book values | ||
Assets | ||
Investments | $95 | $108 |
Liabilities | ||
Short-term borrowings | 425 | 413 |
Current portion of long-term debt and lease obligations | 4,021 | 18 |
Long-term debt and lease obligations, excluding fair value hedges | 10,745 | 14,724 |
Fair value | ||
Assets | ||
Investments | 145 | 129 |
Liabilities | ||
Short-term borrowings | 425 | 413 |
Current portion of long-term debt and lease obligations | 4,033 | 18 |
Long-term debt and lease obligations, excluding fair value hedges | $10,830 | $14,493 |
Financial_Instruments_and_Fair7
Financial Instruments and Fair Value Measures (Details 6) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair value | ||
Assets | ||
Investments | $145 | $129 |
Total assets | 145 | 129 |
Liabilities | ||
Short-term borrowings | 425 | 413 |
Current portion of long-term debt and lease obligations | 4,033 | 18 |
Long-term debt and lease obligations, excluding fair value hedges | 10,830 | 14,493 |
Total liabilities | 15,288 | 14,924 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Investments | 68 | 39 |
Total assets | 68 | 39 |
Liabilities | ||
Current portion of long-term debt and lease obligations | 4,012 | |
Long-term debt and lease obligations, excluding fair value hedges | 10,737 | 14,413 |
Total liabilities | 14,749 | 14,413 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Investments | 13 | 30 |
Total assets | 13 | 30 |
Liabilities | ||
Short-term borrowings | 425 | 413 |
Current portion of long-term debt and lease obligations | 21 | 18 |
Long-term debt and lease obligations, excluding fair value hedges | 93 | 80 |
Total liabilities | 539 | 511 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Investments | 64 | 60 |
Total assets | $64 | $60 |
Financial_Instruments_and_Fair8
Financial Instruments and Fair Value Measures (Details 7) | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | VEF | Governmental accounts in Greece, Portugal, Italy and Spain | Governmental accounts in Greece, Portugal, Italy and Spain | Venezuelan Member | Venezuelan Member | Net accounts receivables | Net accounts receivables | Net accounts receivables | Total sales | Total sales | Total sales | |
customer | USD ($) | USD ($) | USD ($) | VEF | customer | U.S. wholesalers | U.S. wholesalers | HUMIRA | HUMIRA | HUMIRA | ||||||||||||
Concentration of Risk | ||||||||||||||||||||||
Number of principal customers | 3 | 3 | ||||||||||||||||||||
Concentrations risk (as a percent) | 49.00% | 38.00% | 63.00% | 57.00% | 50.00% | |||||||||||||||||
Net governmental receivables outstanding | $446 | $781 | ||||||||||||||||||||
Net monetary assets | 240 | |||||||||||||||||||||
Net sales | 5,452 | 5,019 | 4,926 | 4,563 | 5,111 | 4,658 | 4,692 | 4,329 | 19,960 | 18,790 | 18,380 | 240 | ||||||||||
Exchange rate | 6.3 | 12 | ||||||||||||||||||||
Asset devaluation loss | $114 |
PostEmployment_Benefits_Detail
Post-Employment Benefits (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair value of plan assets | |||
Beginning of period | $3,666,000,000 | ||
End of period | 4,173,000,000 | ||
Amounts recognized in consolidated balance sheets | |||
Long-term liabilities | -2,220,000,000 | -1,628,000,000 | |
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||
Ultimate per capita trend rate for health care costs from 2064 and thereafter | 4.50% | ||
Ultimate per capita trend rate for health care costs from 2051 and thereafter (as a percent) | 5.00% | ||
Effect of 1% change in assumed health care cost trend rates | |||
Effect of one percentage point increase, Service cost and interest cost | 9,000,000 | ||
Effect of one percentage point decrease, Service cost and interest cost | -7,000,000 | ||
Effect of one percentage point increase, Projected benefit obligation | 121,000,000 | ||
Effect of one percentage point decrease, Projected benefit obligation | -92,000,000 | ||
Pre-65 | |||
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||
Annual rate of increase in the per capita cost of covered health care obligation benefits assumed in the current year (as a percent) | 7.50% | ||
Annual rate of increase in the per capita cost of covered health care cost benefits assumed in the current year (as a percent) | 7.90% | ||
Post-65 | |||
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||
Annual rate of increase in the per capita cost of covered health care obligation benefits assumed in the current year (as a percent) | 7.30% | ||
Annual rate of increase in the per capita cost of covered health care cost benefits assumed in the current year (as a percent) | 7.60% | ||
Abbott | |||
Post-Employment Benefits | |||
Expenses for defined benefit plans and post-employment plans | 200,000,000 | ||
Net Periodic Benefit Cost | |||
Contribution by employer | 310,000,000 | ||
AbbVie sponsored plans | |||
Post-Employment Benefits | |||
Defined benefit pension and other post-employment plans assets recognized | 0 | ||
Accumulated benefit obligations | 5,000,000,000 | 3,900,000,000 | |
Fair value of plan assets | |||
Beginning of period | 411,000,000 | 33,000,000 | |
End of period | 474,000,000 | 411,000,000 | |
Amounts recognized in consolidated balance sheets | |||
Other assets | 0 | ||
Net Periodic Benefit Cost | |||
Contribution by employer | 370,000,000 | 145,000,000 | |
AbbVie sponsored plans | Subsequent event | |||
Net Periodic Benefit Cost | |||
Contribution by employer | 150,000,000 | ||
AbbVie sponsored plans | Defined benefit plans | |||
Post-Employment Benefits | |||
Defined benefit pension and other post-employment plans assets recognized | 210,000,000 | 442,000,000 | |
Projected benefit obligations | |||
Beginning of period | 4,484,000,000 | 1,669,000,000 | |
Employee contributions | 1,000,000 | 1,000,000 | |
Plan amendments | 1,000,000 | -1,000,000 | |
Assumption of plan liabilities | 3,009,000,000 | ||
Actuarial (gain) loss | 1,108,000,000 | -455,000,000 | |
Benefits paid | -163,000,000 | -146,000,000 | |
Other, primarily foreign currency translation loss | -140,000,000 | 27,000,000 | |
End of period | 5,681,000,000 | 4,484,000,000 | 1,669,000,000 |
Fair value of plan assets | |||
Beginning of period | 3,666,000,000 | 898,000,000 | |
Actual return on plan assets | 282,000,000 | 491,000,000 | |
Employee contributions | 1,000,000 | 1,000,000 | |
Assumption of plan assets | 2,221,000,000 | ||
Benefits paid | -163,000,000 | -146,000,000 | |
Other, primarily foreign currency translation gain | -43,000,000 | 3,000,000 | |
End of period | 4,173,000,000 | 3,666,000,000 | 898,000,000 |
Funded status at the end of the period | -1,508,000,000 | -818,000,000 | |
Amounts recognized in consolidated balance sheets | |||
Other assets | 210,000,000 | 442,000,000 | |
Current liabilities | -26,000,000 | -27,000,000 | |
Long-term liabilities | -1,692,000,000 | -1,233,000,000 | |
Net liability at the end of the period | -1,508,000,000 | -818,000,000 | |
Actuarial losses, net | 2,216,000,000 | 1,194,000,000 | |
Prior service cost | 19,000,000 | 22,000,000 | |
AOCI at the end of the period | 2,235,000,000 | 1,216,000,000 | |
Pretax losses included in OCI | |||
Actuarial (gain) loss | 1,127,000,000 | -715,000,000 | 98,000,000 |
Prior service cost | 1,000,000 | 15,000,000 | 9,000,000 |
Amortization of prior service cost and actuarial losses | -68,000,000 | -114,000,000 | -7,000,000 |
Foreign exchange loss | -41,000,000 | 2,000,000 | 5,000,000 |
Total pretax (gain) loss recognized in OCI | 1,019,000,000 | -812,000,000 | 105,000,000 |
Expected net periodic benefit cost of 2014 | 114,000,000 | ||
Net Periodic Benefit Cost | |||
Service cost | 173,000,000 | 184,000,000 | 21,000,000 |
Interest cost | 217,000,000 | 196,000,000 | 38,000,000 |
Expected return on plan assets | -302,000,000 | -259,000,000 | -29,000,000 |
Amortization of actuarial losses and prior service costs | 68,000,000 | 114,000,000 | 7,000,000 |
Net periodic benefit cost | 156,000,000 | 235,000,000 | 37,000,000 |
Contribution by employer | 430,000,000 | 198,000,000 | |
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date | |||
Discount rate (as a percent) | 3.90% | 4.90% | |
Rate of compensation increases (as a percent) | 4.40% | 5.00% | |
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||
Discount rate (as a percent) | 4.90% | 4.30% | 5.10% |
Expected long-term rate of return on plan assets (as a percent) | 7.90% | 8.20% | 8.50% |
Expected rate of change in compensation (as a percent) | 5.00% | 5.00% | 4.20% |
AbbVie sponsored plans | Other post-employment plans | |||
Projected benefit obligations | |||
Beginning of period | 403,000,000 | 231,000,000 | |
Plan amendments | -13,000,000 | ||
Assumption of plan liabilities | 209,000,000 | ||
Removal of plans | -12,000,000 | ||
Actuarial (gain) loss | 111,000,000 | -55,000,000 | |
Benefits paid | -8,000,000 | -12,000,000 | |
Other, primarily foreign currency translation loss | 1,000,000 | ||
End of period | 538,000,000 | 403,000,000 | 231,000,000 |
Fair value of plan assets | |||
Benefits paid | -8,000,000 | -12,000,000 | |
Funded status at the end of the period | -538,000,000 | -403,000,000 | |
Amounts recognized in consolidated balance sheets | |||
Current liabilities | -10,000,000 | -8,000,000 | |
Long-term liabilities | -528,000,000 | -395,000,000 | |
Net liability at the end of the period | -538,000,000 | -403,000,000 | |
Actuarial losses, net | 181,000,000 | 74,000,000 | |
Prior service cost | -53,000,000 | -47,000,000 | |
AOCI at the end of the period | 128,000,000 | 27,000,000 | |
Pretax losses included in OCI | |||
Actuarial (gain) loss | 111,000,000 | -42,000,000 | 69,000,000 |
Prior service cost | -13,000,000 | -53,000,000 | |
Amortization of prior service cost and actuarial losses | 3,000,000 | ||
Total pretax (gain) loss recognized in OCI | 101,000,000 | -95,000,000 | 69,000,000 |
Expected net periodic benefit cost of 2014 | 2,000,000 | ||
Net Periodic Benefit Cost | |||
Service cost | 22,000,000 | 23,000,000 | |
Interest cost | 22,000,000 | 19,000,000 | |
Amortization of actuarial losses and prior service costs | -2,000,000 | -1,000,000 | |
Net periodic benefit cost | 42,000,000 | 41,000,000 | |
Contribution by employer | 8,000,000 | 12,000,000 | |
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date | |||
Discount rate (as a percent) | 4.50% | 5.30% | |
Rate of compensation increases (as a percent) | 6.00% | ||
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||
Discount rate (as a percent) | 5.30% | 4.50% | |
AbbVie sponsored plans | International defined benefit pension plans | |||
Fair value of plan assets | |||
End of period | 1,400,000,000 | 1,200,000,000 | |
AbbVie sponsored plans | Plan in which the ABO exceeded plan assets | |||
Post-Employment Benefits | |||
Accumulated benefit obligations | 2,900,000,000 | ||
Projected benefit obligations | |||
End of period | 3,500,000,000 | ||
Fair value of plan assets | |||
End of period | $1,800,000,000 |
PostEmployment_Benefits_Detail1
Post-Employment Benefits (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 4,173 | $3,666 | |
Defined Benefit Pension Plan Assets | Investment risk | |||
Change in value of assets that are measured using significant unobservable inputs | |||
Concentrations risk (as a percent) | 0.00% | ||
U.S. large cap | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 1,314 | 1,197 | |
U.S. mid cap | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 267 | 244 | |
International | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 608 | 614 | |
U.S. government securities | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 216 | 292 | |
Corporate debt instruments | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 326 | 212 | |
Government Securities International | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 425 | 216 | |
Other | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 37 | 52 | |
Absolute return funds | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 848 | 704 | |
Real assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 53 | 70 | |
Defined Benefit Plan Other Assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 79 | 65 | |
Quoted prices in active markets for identical assets (Level 1) | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 1,212 | 1,232 | |
Quoted prices in active markets for identical assets (Level 1) | U.S. large cap | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 588 | 576 | |
Quoted prices in active markets for identical assets (Level 1) | U.S. mid cap | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 67 | 62 | |
Quoted prices in active markets for identical assets (Level 1) | International | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 137 | 225 | |
Quoted prices in active markets for identical assets (Level 1) | U.S. government securities | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 35 | ||
Quoted prices in active markets for identical assets (Level 1) | Corporate debt instruments | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 101 | 57 | |
Quoted prices in active markets for identical assets (Level 1) | Government Securities International | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 201 | 159 | |
Quoted prices in active markets for identical assets (Level 1) | Other | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 29 | 45 | |
Quoted prices in active markets for identical assets (Level 1) | Absolute return funds | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 3 | 3 | |
Quoted prices in active markets for identical assets (Level 1) | Real assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 7 | 8 | |
Quoted prices in active markets for identical assets (Level 1) | Defined Benefit Plan Other Assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 79 | 62 | |
Significant other observable inputs (Level 2) | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 2,487 | 2,023 | |
Significant other observable inputs (Level 2) | U.S. large cap | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 726 | 621 | |
Significant other observable inputs (Level 2) | U.S. mid cap | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 200 | 182 | |
Significant other observable inputs (Level 2) | International | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 471 | 389 | |
Significant other observable inputs (Level 2) | U.S. government securities | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 216 | 257 | |
Significant other observable inputs (Level 2) | Corporate debt instruments | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 225 | 155 | |
Significant other observable inputs (Level 2) | Government Securities International | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 224 | 57 | |
Significant other observable inputs (Level 2) | Other | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 8 | 7 | |
Significant other observable inputs (Level 2) | Absolute return funds | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 371 | 290 | |
Significant other observable inputs (Level 2) | Real assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 46 | 62 | |
Significant other observable inputs (Level 2) | Defined Benefit Plan Other Assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 3 | ||
Significant unobservable inputs (Level 3) | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 474 | 411 | |
Significant unobservable inputs (Level 3) | Absolute return funds | |||
Change in value of assets that are measured using significant unobservable inputs | |||
End of period | 474 | 411 | |
AbbVie sponsored plans | |||
Change in value of assets that are measured using significant unobservable inputs | |||
Beginning of period | 411 | 33 | |
Actual return on plan assets on hand at year end | 21 | 4 | |
Assumption of level 3 assets | 372 | ||
Purchases, sales and settlements, net | 42 | 2 | |
End of period | 474 | 411 | |
Defined benefit plans | |||
Expected Pension and Other Post-Employment Payments | |||
2015 | 161 | ||
2016 | 170 | ||
2017 | 180 | ||
2018 | 192 | ||
2019 | 204 | ||
2020 to 2024 | 1,239 | ||
Defined benefit plans | AbbVie sponsored plans | |||
Change in value of assets that are measured using significant unobservable inputs | |||
Beginning of period | 898 | ||
End of period | 4,173 | 3,666 | 898 |
Defined benefit plans | AbbVie sponsored plans | Equity Securities | |||
Change in value of assets that are measured using significant unobservable inputs | |||
Target investment allocations for Pension Plan (as a percent) | 50.00% | ||
Defined benefit plans | AbbVie sponsored plans | Fixed income securities | |||
Change in value of assets that are measured using significant unobservable inputs | |||
Target investment allocations for Pension Plan (as a percent) | 20.00% | ||
Defined benefit plans | AbbVie sponsored plans | Defined Benefit Plan Other Assets | |||
Change in value of assets that are measured using significant unobservable inputs | |||
Target investment allocations for Pension Plan (as a percent) | 30.00% | ||
Other post-employment plans | |||
Expected Pension and Other Post-Employment Payments | |||
2015 | 10 | ||
2016 | 12 | ||
2017 | 14 | ||
2018 | 15 | ||
2019 | 17 | ||
2020 to 2024 | 115 |
PostEmployment_Benefits_Detail2
Post-Employment Benefits (Details 3) (Stock Retirement Plan, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Retirement Plan | |||
Other | |||
Expenses recorded | $67 | $62 | $67 |
Equity_Details
Equity (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 02, 2013 |
item | ||||
Stock-Based Compensation | ||||
Stock compensation expense recognized | $241 | $212 | $187 | |
Tax benefit on stock compensation expense | 73 | 68 | 56 | |
Incentive stock programs, shares reserved for issuance with respect to post-separation awards for participants | 100,000,000 | |||
Realized excess tax benefits from the exercise of stock options | 56 | 38 | ||
Abbott | ||||
Stock-Based Compensation | ||||
Number of awards received in connection with the separation | 1 | |||
Number of awards granted to employees other than in connection with the separation | 0 | |||
Stock Options | ||||
Stock-Based Compensation | ||||
Tax benefit on stock compensation expense | 46 | |||
Exercise price for awards granted as percentage of market value on the date of grant | 100.00% | |||
Contractual term | 10 years | |||
Incremental vesting | 0.33 | |||
Vesting period | 3 years | |||
Weighted-average grant-date fair value of the stock options granted | $9.83 | $6.87 | $6.80 | |
Options | ||||
Outstanding at the beginning of the period (in shares) | 35,994,000 | |||
Granted (in shares) | 1,134,000 | |||
Exercised (in shares) | -8,765,000 | |||
Lapsed (in shares) | -83,000 | |||
Outstanding at the end of the period (in shares) | 28,280,000 | 35,994,000 | ||
Exercisable at the end of the period (in shares) | 25,497,000 | |||
Weighted average exercise price | ||||
Outstanding at the beginning of the period (in dollars per share) | $27.48 | |||
Granted (in dollars per share) | $51.53 | |||
Exercised (in dollars per share) | $27.18 | |||
Lapsed (in dollars per share) | $25.97 | |||
Outstanding at the end of the period (in dollars per share) | $28.53 | $27.48 | ||
Exercisable at the end of the period (in dollars per share) | $27.20 | |||
Weighted average remaining life (in years) | ||||
Outstanding at the end of the period | 3 years 3 months 18 days | 3 years 7 months 6 days | ||
Exercisable at end of the period | 2 years 9 months 18 days | |||
Aggregate intrinsic value | ||||
Outstanding at the end of the period | 1,044 | 912 | ||
Exercisable at the end of the period | 975 | |||
Additional information | ||||
Unrecognized compensation cost | 4 | |||
Period for recognition of unrecognized compensation cost | 2 years | |||
Aggregate intrinsic value of options exercised | 253 | 229 | ||
Total fair value of options vested | 8 | |||
Stock Options | Abbott | ||||
Additional information | ||||
Aggregate intrinsic value of options exercised | 170 | |||
RSAs & RSUs | ||||
Additional information | ||||
Period for recognition of unrecognized compensation cost | 2 years | |||
Weighted average grant date fair value | ||||
Granted (in dollars per share) | $56.07 | |||
Additional information | ||||
Fair market value of awards vested | 338 | 285 | ||
Unrecognized compensation cost | 192 | |||
RSAs & RSUs | Abbott | ||||
Additional information | ||||
Fair market value of awards vested | $123 | |||
Restricted stock awards | ||||
RSAs & RSUs | ||||
Number of years in which maximum one third of awards will vest out of awards that vest over five years | 1 year | |||
Restricted stock awards | Minimum | ||||
Stock-Based Compensation | ||||
Vesting period | 3 years | |||
Restricted stock awards | Maximum | ||||
Stock-Based Compensation | ||||
Vesting period | 5 years | |||
RSAs & RSUs | ||||
Proportion of awards that will vest in one year out of awards having vesting term over five years | 0.33 | |||
RSUs | ||||
RSAs & RSUs | ||||
Number of shares of common stock to be received by recipient upon vesting for each award vested | 1 | |||
Share units | ||||
Granted (in shares) | 5,112,000 | |||
Vested (in shares) | -6,638,000 | |||
Lapsed (in shares) | -569,000 | |||
Outstanding at the end of the period (in shares) | 12,815,000 | 14,910,000 | ||
Weighted average grant date fair value | ||||
Granted (in dollars per share) | $51.55 | |||
Vested (in dollars per share) | $29.43 | |||
Lapsed (in dollars per share) | $38.48 | |||
Outstanding at the end of the period (in dollars per share) | $40.98 | $32.07 |
Equity_Details_2
Equity (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Jan. 04, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Dividends | |||||||||||
Dividends declared (in dollars per share) | $0.40 | $0.49 | $0.42 | $0.42 | $0.42 | $0.40 | $0.40 | $0.40 | $0.80 | $1.75 | $2 |
Quarter One | |||||||||||
Dividends Payable | |||||||||||
Date declared | 4-Jan-13 | 20-Feb-14 | |||||||||
Date paid | 15-May-14 | ||||||||||
Cash Dividends | |||||||||||
Dividends declared (in dollars per share) | $0.40 | $0.42 | |||||||||
Percentage increase in dividends declared | 5.00% | ||||||||||
Quarter Two | |||||||||||
Dividends Payable | |||||||||||
Date declared | 18-Jun-14 | ||||||||||
Date paid | 15-Aug-14 | ||||||||||
Cash Dividends | |||||||||||
Dividends declared (in dollars per share) | $0.42 | ||||||||||
Quarter Three | |||||||||||
Dividends Payable | |||||||||||
Date declared | 20-Oct-14 | 19-Sep-14 | |||||||||
Date of record | 15-Jan-15 | ||||||||||
Date paid | 13-Feb-15 | 17-Nov-14 | |||||||||
Cash Dividends | |||||||||||
Dividends declared (in dollars per share) | $0.49 | $0.42 | |||||||||
Quarter Four | |||||||||||
Dividends Payable | |||||||||||
Date declared | 12-Dec-13 | ||||||||||
Date of record | 15-Jan-14 | ||||||||||
Date paid | 14-Feb-14 | ||||||||||
Cash Dividends | |||||||||||
Dividends declared (in dollars per share) | $0.40 |
Equity_Details_3
Equity (Details 3) (USD $) | 12 Months Ended | ||||
Share data in Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 20, 2014 | Feb. 15, 2013 |
Stock Repurchase Program | |||||
Amount authorized under stock repurchase program | $5,000,000,000 | $1,500,000,000 | |||
Shares repurchased | 9 | 4 | |||
Payment for shares repurchased on the open market | 550,000,000 | 223,000,000 | |||
Share repurchase authorization amount remaining | 4,700,000,000 | ||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | -442,000,000 | -350,000,000 | -25,000,000 | ||
Other comprehensive (loss) income before reclassifications | -1,712,000,000 | 491,000,000 | -18,000,000 | ||
Amounts reclassified from accumulated other comprehensive loss | 123,000,000 | 79,000,000 | -11,000,000 | ||
Other comprehensive income (loss) | -1,589,000,000 | 570,000,000 | -29,000,000 | ||
Separation-related adjustments | -662,000,000 | -296,000,000 | |||
Ending balance | -2,031,000,000 | -442,000,000 | -350,000,000 | ||
Foreign currency translation adjustments | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | 470,000,000 | 181,000,000 | 8,000,000 | ||
Other comprehensive (loss) income before reclassifications | -1,073,000,000 | 48,000,000 | 173,000,000 | ||
Other comprehensive income (loss) | -1,073,000,000 | 48,000,000 | 173,000,000 | ||
Separation-related adjustments | 241,000,000 | ||||
Ending balance | -603,000,000 | 470,000,000 | 181,000,000 | ||
Pension and post-employment benefits | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | -827,000,000 | -511,000,000 | -65,000,000 | ||
Other comprehensive (loss) income before reclassifications | -827,000,000 | 519,000,000 | -157,000,000 | ||
Amounts reclassified from accumulated other comprehensive loss | 46,000,000 | 79,000,000 | 7,000,000 | ||
Other comprehensive income (loss) | -781,000,000 | 598,000,000 | -150,000,000 | ||
Separation-related adjustments | -914,000,000 | -296,000,000 | |||
Ending balance | -1,608,000,000 | -827,000,000 | -511,000,000 | ||
Unrealized gains (losses) on marketable equity securities | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | 2,000,000 | 1,000,000 | 26,000,000 | ||
Other comprehensive (loss) income before reclassifications | 1,000,000 | 1,000,000 | -25,000,000 | ||
Other comprehensive income (loss) | 1,000,000 | 1,000,000 | -25,000,000 | ||
Ending balance | 3,000,000 | 2,000,000 | 1,000,000 | ||
Gains (losses) on hedging activities | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | -87,000,000 | -21,000,000 | 6,000,000 | ||
Other comprehensive (loss) income before reclassifications | 187,000,000 | -77,000,000 | -9,000,000 | ||
Amounts reclassified from accumulated other comprehensive loss | 77,000,000 | -18,000,000 | |||
Other comprehensive income (loss) | 264,000,000 | -77,000,000 | -27,000,000 | ||
Separation-related adjustments | 11,000,000 | ||||
Ending balance | $177,000,000 | ($87,000,000) | ($21,000,000) |
Equity_Details_4
Equity (Details 4) (USD $) | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Significant amounts reclassified out of each component of AOCI | ||
Preferred stock authorized (in shares) | 200,000,000 | |
Preferred stock par value (in dollars per share) | $0.01 | |
Preferred stock issued (in shares) | 0 | |
Preferred stock outstanding (in shares) | 0 | |
Pension and post-employment benefits | Amount reclassified from accumulated other comprehensive loss | ||
Significant amounts reclassified out of each component of AOCI | ||
Amortization of actuarial losses and other | $66 | $114 |
Less tax expense | -20 | -35 |
Total reclassification, net of tax | 46 | 79 |
Gains (losses) on hedging activities | Amount reclassified from accumulated other comprehensive loss | ||
Significant amounts reclassified out of each component of AOCI | ||
Gains (losses) on designated cash flow hedges | -79 | |
Less tax expense | 2 | |
Total reclassification, net of tax | ($77) |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Before Income Taxes | |||
Domestic | ($3,245) | ($581) | $625 |
Foreign | 5,614 | 5,913 | 5,100 |
Total earnings before income taxes | 2,369 | 5,332 | 5,725 |
Current | |||
Domestic | 634 | 226 | 94 |
Foreign | 341 | 354 | 252 |
Total current taxes | 975 | 580 | 346 |
Deferred | |||
Domestic | -301 | 678 | 89 |
Foreign | -79 | -54 | 15 |
Total deferred taxes | -380 | 624 | 104 |
Total income taxes | 595 | 1,204 | 450 |
Effective Tax Rate Reconciliation | |||
Statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit (as a percent) | 0.30% | 0.10% | |
Effect of foreign operations (as a percent) | -11.30% | -11.50% | -23.50% |
U.S. tax credits (as a percent) | -8.90% | -2.70% | -1.50% |
Branded prescription drug fee (as a percent) | 3.70% | 0.40% | 0.30% |
Valuation allowances (as a percent) | 3.60% | 0.10% | |
Resolution of uncertain tax positions (as a percent) | -3.40% | ||
Non-deductible litigation loss (as a percent) | 0.60% | ||
All other, net (as a percent) | 3.00% | 1.00% | 0.30% |
Effective tax rate (as a percent) | 25.10% | 22.60% | 7.90% |
Tax benefits recognized as a result of favorable resolution of various tax positions | 195 | ||
Deferred tax assets | |||
Compensation and employee benefits | 627 | 279 | |
Accruals and reserves | 376 | 252 | |
Chargebacks and rebates | 297 | 333 | |
Deferred revenue | 382 | 348 | |
Depreciation | 53 | 64 | |
State income taxes | 62 | 67 | |
Other | 230 | 122 | |
Net operating losses and other credit carryforwards | 125 | 115 | |
Total deferred tax assets | 2,152 | 1,580 | |
Valuation allowances | -172 | -43 | |
Total net deferred tax assets | 1,980 | 1,537 | |
Deferred tax liabilities | |||
Excess of book basis over tax basis of intangible assets | -331 | -508 | |
Repatriation of foreign earnings | -326 | -606 | |
Total deferred tax liabilities | -657 | -1,114 | |
Net deferred tax asset | 1,323 | 423 | |
State | |||
Deferred tax assets | |||
Valuation allowances | $129 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income taxes | ||
Operating loss carryforwards | $19 | |
Additional Expenses | 129 | |
Valuation allowances | 172 | 43 |
Foreign | ||
Income taxes | ||
Operating loss carryforwards | 113 | |
State | ||
Income taxes | ||
Operating loss carryforwards | 1,100 | |
Valuation allowances | ($129) |
Income_Taxes_Details_3
Income Taxes (Details 3) (State, USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
State | |
Tax credit carryforwards | |
Tax credit carryforwards | $91 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes | |||
Undistributed foreign earnings, indefinitely reinvested for continued use in foreign operations | $23,000,000,000 | ||
Unrecognized Tax Benefits | |||
Balance at the beginning of the period | 247,000,000 | 1,140,000,000 | 1,039,000,000 |
Increase due to current year tax positions | 115,000,000 | 195,000,000 | 370,000,000 |
Increase due to prior year tax positions | 67,000,000 | 1,000,000 | |
Decrease due to prior year tax positions | -6,000,000 | -220,000,000 | |
Settlements | -50,000,000 | ||
Lapse of statutes of limitations | -2,000,000 | ||
Separation-related adjustments | -1,088,000,000 | ||
Balance at the end of the period | 421,000,000 | 247,000,000 | 1,140,000,000 |
Reimbursement receivable for unrecognized tax benefits and related interest and penalties for periods after separation | 41,000,000 | ||
Net amount of potential tax benefits that would impact the entity's effective tax rate | 389,000,000 | 218,000,000 | |
Reasonably possible amount that gross unrecognized tax benefits may change within the next twelve months, high end of range | $31,000,000 |
Legal_Proceedings_and_Continge1
Legal Proceedings and Contingencies (Details) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |
Nov. 30, 2014 | Aug. 31, 2013 | Dec. 31, 2014 | Nov. 30, 2009 | |
item | item | item | ||
Legal Proceedings and Contingencies | ||||
Number of individual plaintiff lawsuits | 5 | |||
Depakote | Sidney Hillman Health Center of Rochester, et al. v. AbbVie Inc., et al. | ||||
Legal Proceedings and Contingencies | ||||
Number of healthcare benefit providers who filed lawsuits | 3 | |||
HUMIRA patent infringement claim, NYU and Centocor | AndroGel Antitrust Litigation | ||||
Legal Proceedings and Contingencies | ||||
Number of generic companies with whom certain litigation related agreements were entered into | 3 | |||
Number of individual plaintiff lawsuits | 3 | |||
Number of purported class actions | 7 | |||
Allegation of proposed generic products infringing AbbVie's patents and seeking declaratory and injunctive relief | Matrix Laboratories, Inc.'s, Matrix Laboratories, Ltd.'s, and Mylan, Inc.'s case | ||||
Legal Proceedings and Contingencies | ||||
Stay period | 5 years |
Segment_and_Geographic_Area_In2
Segment and Geographic Area Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||||||||||
customer | |||||||||||
Segment Information | |||||||||||
Number of Operating Segments | 1 | ||||||||||
Number of principal customers | 3 | ||||||||||
Segment Information | |||||||||||
Net sales | $5,452 | $5,019 | $4,926 | $4,563 | $5,111 | $4,658 | $4,692 | $4,329 | $19,960 | $18,790 | $18,380 |
HUMIRA | |||||||||||
Segment Information | |||||||||||
Net sales | 12,543 | 10,659 | 9,265 | ||||||||
AndroGel | |||||||||||
Segment Information | |||||||||||
Net sales | 934 | 1,035 | 1,152 | ||||||||
Kaletra | |||||||||||
Segment Information | |||||||||||
Net sales | 870 | 962 | 1,013 | ||||||||
Synagis | |||||||||||
Segment Information | |||||||||||
Net sales | 835 | 827 | 825 | ||||||||
Lupron | |||||||||||
Segment Information | |||||||||||
Net sales | 778 | 785 | 800 | ||||||||
Synthroid | |||||||||||
Segment Information | |||||||||||
Net sales | 709 | 622 | 551 | ||||||||
Sevoflurane | |||||||||||
Segment Information | |||||||||||
Net sales | 550 | 568 | 602 | ||||||||
Creon | |||||||||||
Segment Information | |||||||||||
Net sales | 516 | 412 | 353 | ||||||||
Dyslipidemia products | |||||||||||
Segment Information | |||||||||||
Net sales | 328 | 1,076 | 2,145 | ||||||||
Duodopa | |||||||||||
Segment Information | |||||||||||
Net sales | 220 | 178 | 149 | ||||||||
VIEKIRA | |||||||||||
Segment Information | |||||||||||
Net sales | 48 | ||||||||||
All other | |||||||||||
Segment Information | |||||||||||
Net sales | $1,629 | $1,666 | $1,525 |
Segment_and_Geographic_Area_In3
Segment and Geographic Area Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Disclosure based on the country that sold the product | |||||||||||
Net sales | $5,452 | $5,019 | $4,926 | $4,563 | $5,111 | $4,658 | $4,692 | $4,329 | $19,960 | $18,790 | $18,380 |
Long-lived assets | 2,500 | 2,300 | 2,500 | 2,300 | |||||||
United States | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 10,845 | 10,181 | 10,435 | ||||||||
Germany | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 1,035 | 911 | 756 | ||||||||
The Netherlands | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 969 | 858 | 776 | ||||||||
United Kingdom | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 722 | 606 | 552 | ||||||||
France | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 584 | 540 | 500 | ||||||||
Japan | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 581 | 625 | 718 | ||||||||
Canada | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 551 | 538 | 500 | ||||||||
Spain | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 534 | 543 | 525 | ||||||||
Brazil | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 435 | 439 | 434 | ||||||||
Italy | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 432 | 404 | 408 | ||||||||
All other countries | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net sales | 3,272 | 3,145 | 2,776 | ||||||||
United States and Puerto Rico | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Long-lived assets | 1,800 | 1,600 | 1,800 | 1,600 | |||||||
Europe | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Long-lived assets | $551 | $591 | $551 | $591 |
Quarterly_Financial_Data_unaud2
Quarterly Financial Data (unaudited) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Jan. 04, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $5,452 | $5,019 | $4,926 | $4,563 | $5,111 | $4,658 | $4,692 | $4,329 | $19,960 | $18,790 | $18,380 | |
Gross margin | 4,333 | 3,925 | 3,813 | 3,463 | 3,829 | 3,566 | 3,638 | 3,176 | ||||
Net earnings | -810 | 506 | 1,098 | 980 | 1,128 | 964 | 1,068 | 968 | 1,774 | 4,128 | 5,275 | |
Basic earnings per share (in dollars per share) | ($0.51) | $0.32 | $0.69 | $0.61 | $0.70 | $0.60 | $0.67 | $0.61 | $1.11 | $2.58 | $3.35 | |
Diluted earnings per share (in dollars per share) | ($0.51) | $0.31 | $0.68 | $0.61 | $0.70 | $0.60 | $0.66 | $0.60 | $1.10 | $2.56 | $3.35 | |
Cash dividends declared per common share (in dollars per share) | $0.40 | $0.49 | $0.42 | $0.42 | $0.42 | $0.40 | $0.40 | $0.40 | $0.80 | $1.75 | $2 | |
Cash Dividends | ||||||||||||
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 36 | |||||||||||
Payments to Acquire in Process Research and Development Collaborations | 750 | |||||||||||
Calico Life Sciences LLC | ||||||||||||
Cash Dividends | ||||||||||||
Payments to Acquire in Process Research and Development Collaborations | 750 | 750 | ||||||||||
Infinity Pharmaceuticals Inc Member | ||||||||||||
Cash Dividends | ||||||||||||
Payments to Acquire in Process Research and Development Collaborations | $173 | |||||||||||
Quarter One | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $0.40 | $0.42 | ||||||||||
Cash Dividends | ||||||||||||
Date declared | 4-Jan-13 | 20-Feb-14 |