Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | AbbVie Inc. | ||
Entity Central Index Key | 1,551,152 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 109,991,857,664 | ||
Entity Common Stock, Shares Outstanding | 1,611,238,226 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Consolidated Statements of Earnings | ||||
Net Revenues | $ 22,859 | $ 19,960 | $ 18,790 | |
Cost of products sold | 4,500 | 4,426 | 4,581 | |
Selling, general and administrative | 6,387 | 7,724 | 5,352 | |
Research and development | 4,285 | 3,297 | 2,855 | |
Acquired in-process research and development | 150 | 352 | 338 | |
Other expense | 750 | |||
Total operating costs and expenses | 15,322 | 16,549 | 13,126 | |
Operating earnings | 7,537 | 3,411 | 5,664 | |
Interest expense, net | 686 | 391 | 278 | |
Net foreign exchange loss | 193 | 678 | 55 | |
Other (income) expense, net | 13 | (27) | (1) | |
Earnings before income tax expense | 6,645 | 2,369 | 5,332 | |
Income tax expense | 1,501 | 595 | 1,204 | |
Net earnings | $ 5,144 | $ 1,774 | $ 4,128 | |
Per share data | ||||
Basic earnings per share (in dollars per share) | $ 3.15 | $ 1.11 | $ 2.58 | |
Diluted earnings per share (in dollars per share) | 3.13 | 1.10 | 2.56 | |
Cash dividends declared per common share (in dollars per share) | $ 2.10 | $ 1.75 | $ 2 | [1] |
Weighted-average basic shares outstanding (in shares) | 1,625 | 1,595 | 1,589 | |
Weighted-average diluted shares outstanding (in shares) | 1,637 | 1,610 | 1,604 | |
[1] | 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. |
Consolidated Statements of Ear3
Consolidated Statements of Earnings (Parenthetical) - $ / shares | Jan. 04, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Earnings | |||||||||||||
Dividends declared (in dollars per share) | $ 0.40 | $ 0.57 | $ 0.51 | $ 0.51 | $ 0.51 | $ 0.49 | $ 0.42 | $ 0.42 | $ 0.42 | $ 2.10 | $ 1.75 | $ 2 | [1] |
[1] | On January 4, 2013, a cash dividend of $0.40 per share of common stock was declared from pre-separation earnings and was recorded as a reduction of additional paid-in capital. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Net earnings | $ 5,144 | $ 1,774 | $ 4,128 |
Foreign currency translation adjustments, net of tax (benefit) expense of $(139) in 2015, $(158) in 2014, and $71 in 2013 | (667) | (1,073) | 48 |
Pension and post-employment benefits, net of tax expense (benefit) of $96 in 2015, $(351) in 2014, and $309 in 2013 | 230 | (781) | 598 |
Unrealized gains on marketable equity securities, net of tax expense of $22 in 2015, $1 in 2014, and $- in 2013 | 44 | 1 | 1 |
Hedging activities, net of tax (benefit) expense of $(6) in 2015, $8 in 2014, and $- in 2013 | (137) | 264 | (77) |
Other comprehensive (loss) income | (530) | (1,589) | 570 |
Comprehensive income | $ 4,614 | $ 185 | $ 4,698 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Foreign currency translation adjustments, tax expense (benefit) | $ (139) | $ (158) | $ 71 |
Pension and post-employment benefits, tax expense | (96) | 351 | $ (309) |
Unrealized gains on marketable equity securities, tax expense | 22 | 1 | |
Hedging activities, tax (benefit) expense | $ (6) | $ 8 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and equivalents | $ 8,399 | $ 8,348 |
Short-term investments | 8 | 26 |
Accounts and other receivables, net | 4,730 | 3,735 |
Inventories, net | 1,719 | 1,124 |
Deferred income taxes | 896 | |
Prepaid expenses and other | 1,458 | 1,952 |
Total current assets | 16,314 | 16,081 |
Investments | 145 | 92 |
Property and equipment, net | 2,565 | 2,485 |
Intangible assets, net of amortization | 19,709 | 1,513 |
Goodwill | 13,168 | 5,862 |
Other assets | 1,149 | 1,480 |
Total assets | 53,050 | 27,513 |
Current liabilities | ||
Short-term borrowings | 406 | 425 |
Current portion of long-term debt and lease obligations | 2,025 | 4,014 |
Accounts payable and accrued liabilities | 8,463 | 6,954 |
Total current liabilities | 10,894 | 11,393 |
Long-term debt and lease obligations | 29,240 | 10,538 |
Deferred income taxes | 5,276 | 159 |
Other long-term liabilities | $ 3,695 | $ 3,681 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value, authorized 4,000,000,000 shares, issued 1,749,027,140 and 1,609,519,046 shares as of December 31, 2015 and 2014, respectively | $ 17 | $ 16 |
Common stock held in treasury, at cost, 139,134,205 and 18,129,715 shares as of December 31, 2015 and 2014, respectively | (8,839) | (972) |
Additional paid-in-capital | 13,080 | 4,194 |
Retained earnings | 2,248 | 535 |
Accumulated other comprehensive loss | (2,561) | (2,031) |
Total stockholders' equity | 3,945 | 1,742 |
Total liabilities and equity | $ 53,050 | $ 27,513 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
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) | 1,749,027,140 | 1,609,519,046 |
Common stock held in treasury, at cost (in shares) | 139,134,205 | 18,129,715 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Treasury Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Parent Company | Total |
Balance at Dec. 31, 2012 | $ (350) | $ 3,713 | $ 3,363 | ||||
Beginning balance at Dec. 31, 2012 | (350) | ||||||
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 and other | (97) | 583 | $ 486 | ||||
Stock-based compensation plans and other (in shares) | 14 | ||||||
Ending balance at Dec. 31, 2013 | $ 16 | (320) | 3,671 | 1,567 | (442) | 4,492 | |
Balance (in shares) at Dec. 31, 2013 | 1,587 | ||||||
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 and other | (102) | 523 | $ 421 | ||||
Stock-based compensation plans and other (in shares) | 13 | ||||||
Ending balance at Dec. 31, 2014 | $ 16 | (972) | 4,194 | 535 | (2,031) | 1,742 | |
Balance (in shares) at Dec. 31, 2014 | 1,591 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 5,144 | 5,144 | |||||
Other comprehensive income (loss), net of tax | (530) | (530) | |||||
Dividends declared | (3,431) | (3,431) | |||||
Common shares issued to Pharrmacyclics Inc. stockholders | $ 1 | 8,404 | 8,405 | ||||
Common shares issued to Pharrmacyclics Inc. stockholders (in shares) | 128 | ||||||
Share repurchases | (7,774) | $ (7,774) | |||||
Share repurchases (in shares) | (119) | (46) | |||||
Stock-based compensation plans and other | (93) | 482 | $ 389 | ||||
Stock-based compensation plans and other (in shares) | 10 | ||||||
Ending balance at Dec. 31, 2015 | $ 17 | $ (8,839) | $ 13,080 | $ 2,248 | $ (2,561) | $ 3,945 | |
Balance (in shares) at Dec. 31, 2015 | 1,610 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Cash flows from operating activities | ||||
Net earnings | $ 5,144 | $ 1,774 | $ 4,128 | |
Adjustments to reconcile net earnings to net cash from operating activities: | ||||
Depreciation | 417 | 383 | 388 | |
Amortization of intangible assets | 419 | 403 | 509 | |
Stock-based compensation | 282 | 241 | 212 | |
Upfront costs and milestones related to collaborations | 280 | 1,102 | 338 | |
Other, net | 489 | 434 | 34 | |
Changes in operating assets and liabilities, net of acquisitions: | ||||
Accounts and other receivables | (1,076) | (172) | 681 | |
Inventories | (434) | (203) | (56) | |
Prepaid expenses and other assets | 511 | (220) | 459 | |
Accounts payable and other liabilities | 1,503 | (193) | (426) | |
Cash flows from operating activities | 7,535 | [1] | 3,549 | 6,267 |
Cash flows from investing activities | ||||
Acquisitions of Pharmacyclics, Inc., net of cash acquired | (11,488) | |||
Other acquisitions and investments | (964) | (622) | (405) | |
Acquisitions of property and equipment | (532) | (612) | (491) | |
Purchases of investment securities | (851) | (1,169) | (930) | |
Sales and maturities of investment securities | 880 | 1,477 | 2,705 | |
Other | 19 | |||
Cash flows from investing activities | (12,936) | (926) | 879 | |
Cash flows from financing activities | ||||
Net change in short-term borrowings | (19) | 12 | (601) | |
Proceeds from issuance of long-term debt | 20,660 | |||
Repayments of long-term debt and capital leases | (4,018) | (17) | ||
Debt issuance cost | (182) | (141) | ||
Dividends paid | (3,294) | (2,661) | (2,555) | |
Purchases of treasury stock | (7,567) | (652) | (320) | |
Proceeds from the exercise of stock options | 142 | 225 | 347 | |
Net transactions with Abbott Laboratories, excluding non-cash items | (247) | |||
Other, net | 30 | (59) | (66) | |
Cash flows from financing activities | 5,752 | (3,293) | (3,442) | |
Effect of exchange rate changes on cash and equivalents | (300) | (577) | (10) | |
Net increase (decrease) in cash and equivalents | 51 | (1,247) | 3,694 | |
Cash and equivalents, beginning of period | 8,348 | 9,595 | 5,901 | |
Cash and equivalents, end of period | 8,399 | 8,348 | 9,595 | |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||||
Issuance of common stock associated with the acquisition of Pharmacyclics, Inc. | 8,405 | |||
Other supplemental information | ||||
Interest paid, net of portion capitalized | 536 | 419 | 283 | |
Income taxes paid | $ 1,108 | $ 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 plc. Refer to Note 5 for additional information. |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
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 net revenues 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. AbbVie's common stock began trading "regular-way" under the ticker symbol "ABBV" on the New York Stock Exchange on January 2, 2013. During 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 AbbVie's historical financial statements prior to January 1, 2013 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 included 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 facilitated the separation by allowing AbbVie to operate independently prior to establishing stand-alone back office functions across its organization. The transition services agreements had original terms of 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. With certain limited exceptions, the remaining transition services agreements terminated on or prior to December 31, 2015. During the years ended December 31, 2015, 2014, and 2013, AbbVie incurred $270 million, $445 million, and $254 million, respectively, of separation-related expenses, which were principally classified in selling, general and administrative expenses (SG&A) in the consolidated statements of earnings. These charges principally related to information technology, legal and regulatory fees. 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, 2015, 2014, and 2013. Net revenues related to these operations for 2015, 2014, and 2013 totaled approximately $213 million, $282 million, and $738 million, respectively. With the exception of Venezuela, all of these operations have been transferred to AbbVie as of December 31, 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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 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, 2015 and 2014 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 expense (income), net in the consolidated statements of earnings. 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 revenues are recorded. Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer. For each type of rebate, the factors used in the calculations of the accrual for that rebate include the identification of the products subject to the rebate, the applicable price terms, and the estimated lag time between sale and payment of the rebate, which can be significant. 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 revenues. 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 Expenses Internal research and development (R&D) expenses 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 as intangible assets and amortized to cost of products sold over the remaining useful life of the related product. 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) expenses in the consolidated statements of earnings. Subsequent payments made to the partner for the achievement of milestones during the development stage are expensed to R&D expenses in the consolidated statements of earnings 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 to cost of products sold in the consolidated statements of earnings when incurred. Advertising Costs associated with advertising are expensed as incurred and are included in SG&A expenses in the consolidated statements of earnings. Advertising expenses were $704 million, $665 million, and $626 million in 2015, 2014, and 2013, respectively. Pension and Other 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 periodic benefit cost over a five-year period. 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. Cash and Equivalents Cash and equivalents include time deposits and money market funds 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 securities. 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 (AOCI) 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, a cost basis investment is written down with a charge to other expense (income), net in the consolidated statements of earnings and an available-for-sale investment's unrealized loss is reclassified from AOCI to other expense (income), net in the consolidated statements of earnings. 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 $78 million and $74 million at December 31, 2015 and 2014, respectively. 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) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Finished goods $ $ Work-in-process Raw materials ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net as of December 31, 2015 included $356 million acquired through the acquisition of Pharmacyclics, Inc. (Pharmacyclics) on May 26, 2015. Refer to Note 5 for additional information. Property and Equipment as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Land $ $ Buildings Equipment Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, gross Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 was $417 million, $383 million, and $388 million in 2015, 2014, and 2013, 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 and Contingencies Loss contingency provisions are recorded 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. 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 evaluated quarterly and adjusted if necessary 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 expense (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 test, 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 2015, the company concluded goodwill was not impaired. In 2015 and 2013, no intangible impairment charges were recorded. 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 the consolidated statements of earnings. 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 in the consolidated statements of earnings 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 (OCI) in the consolidated statements of comprehensive 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 net foreign exchange loss in the consolidated statements of 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 consolidated 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 AOCI 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 AOCI 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 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. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) 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 this standard 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. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) modified retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU No. 2015-4, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date of ASU 2014-09 by one year for all entities. Accordingly, this standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. AbbVie is currently assessing the timing of its adoption and the impact of adopting this guidance on its consolidated financial statements and the implementation approach to be used. In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted on a retrospective basis. AbbVie elected to early adopt this new standard, effective in the three months ended June 30, 2015. As a result, AbbVie reclassified approximately $7 million and $27 million of net deferred financing costs as of December 31, 2014 that were previously classified as prepaid expenses and other current assets and other long-term assets, respectively, to long-term debt and lease obligations (current and non-current). Total debt issuance costs classified as a reduction of long-term debt and lease obligations (current and non-current) were $117 million as of December 31, 2015. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . This standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Entities are currently required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. This standard is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to measurement period adjustments that occur after the effective date of the guidance with earlier application permitted for financial statements that have not been issued. AbbVie elected to early adopt the standard, effective in the year ended December 31, 2015. The impact of this adoption was not material. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Entities are currently required to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. The amendments, which require non-current presentation only (by jurisdiction), are effective for financial statements issued for annual periods beginning after December 15, 2016 with earlier application permitted as of the beginning of an interim or annual reporting period. The guidance is to be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. AbbVie elected to early adopt this standard on a prospective basis, effective as of December 31, 2015 in order to simplify the presentation of deferred tax assets and liabilities. Prior periods were not retrospectively adjusted. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The standard requires several targeted changes including that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The new guidance also changes certain disclosure requirements and other aspects of current US GAAP. Amendments are to be applied as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. This standard is effective for fiscal years starting after December 15, 2017, including interim periods within those fiscal years. The standard does not permit early adoption with the exception of certain targeted provisions. AbbVie is currently assessing the impact and timing of adopting this guidance on its consolidated financial statements. |
Supplemental Financial Informat
Supplemental Financial Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Financial Information | |
Supplemental Financial Information | Note 3 Supplemental Financial Information Interest Expense, Net years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense $ $ $ Interest income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net in 2015 included $86 million of bridge financing-related costs incurred in connection with the acquisition of Pharmacyclics. Refer to Note 5 for additional information. Interest expense, net in 2014 included $141 million of financing related fees incurred in connection with the terminated proposed combination with Shire plc, a company incorporated in Jersey (Shire). Other Expense (Income), Net Other expense (income), net, includes income or expense from the resolution of certain contractual agreements, impairments of equity securities, and gains and losses on the sale of equity securities. Other expense, net in 2015 primarily consisted of impairments of certain 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) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Sales rebates $ $ Accounts payable Dividends payable Salaries, wages and commissions Royalty and license arrangements Other ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Long-Term Liabilities as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Pension and other post-employment benefits $ $ Liabilities for unrecognized tax benefits Other ​ ​ ​ ​ ​ ​ ​ ​ Other long-term liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share | |
Earnings Per Share | Note 4 Earnings Per Share AbbVie calculates earnings per share (EPS) using the more dilutive of the treasury stock or 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 be 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. For all periods presented, the two-class method was more dilutive. As such, the dilutive effect of unvested RSUs and RSAs of approximately 4 million, 4 million, and 5 million shares for 2015, 2014 and 2013, respectively, were 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 2015, 2014, and 2013 were $26 million, $9 million, and $26 million, respectively. As further described in Note 12, AbbVie entered into and executed a $5.0 billion accelerated share repurchase agreement (ASR) with Morgan Stanley & Co. LLC (Morgan Stanley) on May 26, 2015, pursuant to which AbbVie paid $5.0 billion for an initial delivery of 68 million shares of AbbVie's common stock. The initial delivery of shares represented approximately 90 percent of the total shares expected to be delivered under the ASR. Morgan Stanley subsequently delivered an additional 5 million shares of AbbVie's common stock to AbbVie in final settlement of the ASR in August 2015. For purposes of calculating EPS, AbbVie reflected the ASR as a repurchase of AbbVie common stock. The number of common shares issuable under stock-based compensation plans that were excluded from the computation of earnings per common share because the effect would have been antidilutive were not material for all periods presented. |
Licensing, Acquisitions and Oth
Licensing, Acquisitions and Other Arrangements | 12 Months Ended |
Dec. 31, 2015 | |
Licensing, Acquisitions and Other Arrangements | |
Licensing, Acquisitions and Other Arrangements | Note 5 Licensing, Acquisitions and Other Arrangements Acquisition of Pharmacyclics On May 26, 2015, AbbVie acquired Pharmacyclics through a tender offer for approximately $20.8 billion, including cash consideration of $12.4 billion and equity consideration of $8.4 billion. Pharmacyclics is a biopharmaceutical company that develops and commercializes novel therapies for people impacted by cancer. Pharmacyclics markets IMBRUVICA® (ibrutinib), a Bruton's tyrosine kinase (BTK) inhibitor, targeting B-cell malignancies. Each outstanding Pharmacyclics share was exchanged for (i) $152.25 in cash and $109.00 in fair market value of AbbVie common stock, (ii) $261.25 in cash, or (iii) $261.25 in fair market value of AbbVie common stock, at the election of each holder, subject to the election and proration of the consideration at 58 percent cash and 42 percent AbbVie common stock. The total consideration for the acquisition of Pharmacyclics was approximately $20.8 billion, consisting of cash and approximately 128 million shares of AbbVie common stock, and is summarized as follows: (in millions) ​ ​ ​ ​ ​ Fair value of AbbVie common stock issued to Pharmacyclics stockholders $ Cash consideration paid to Pharmacyclics stockholders Cash consideration paid to Pharmacyclics equity award holders ​ ​ ​ ​ ​ Total consideration $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The acquisition of Pharmacyclics was accounted for as a business combination using the acquisition method of accounting. This method requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. The valuation of assets acquired and liabilities assumed in the acquisition has not yet been finalized as of December 31, 2015. As a result, AbbVie recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. The completion of the valuation will occur no later than one year from the acquisition date and may result in significant changes to the recognized assets and liabilities. The following table summarizes preliminary fair values of assets acquired and liabilities assumed as of the May 26, 2015 acquisition date: (in millions) ​ ​ ​ ​ ​ Assets acquired and liabilities assumed Cash and equivalents $ Short-term investments Accounts and other receivables Inventories Other assets Intangible assets Definite-lived developed product rights Definite-lived license agreements Indefinite-lived research and development Accounts payable and accrued liabilities ) Deferred income taxes ) Other long-term liabilities ) ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ Total assets acquired and liabilities assumed $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair market value step-up adjustment to inventories of $445 million is being amortized to cost of products sold when the inventory is sold to customers, which is expected to be a period of approximately 18 months from the acquisition date. Intangible assets relate to the IMBRUVICA developed product rights, IPR&D in the United States related to additional indications for IMBRUVICA, and the contractual rights to IMBRUVICA profits and losses outside the United States as a result of the collaboration agreement with Janssen Biotech, Inc. and its affiliates (Janssen), one of the Janssen Pharmaceutical companies of Johnson & Johnson. Refer to Note 6 for additional information regarding the collaboration with Janssen. The acquired definite-lived intangible assets are being amortized over a weighted-average estimated useful life of 12 years using the estimated pattern of economic benefit. The estimated fair value of the IPR&D and identifiable intangible assets was determined using the "income approach," which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each asset or product (including net revenues, cost of sales, R&D costs, selling and marketing costs, and working capital/contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset's life cycle, the potential regulatory and commercial success risks, competitive trends impacting the asset and each cash flow stream, as well as other factors. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recognized from the acquisition of Pharmacyclics includes expected synergies, including the ability to leverage the respective strengths of each business, expanding the combined company's product portfolio, acceleration of clinical and commercial presence in oncology and establishment of a strong leadership position in hematological oncology. The goodwill is not deductible for tax purposes. From the acquisition date through December 31, 2015, AbbVie's consolidated statement of earnings for 2015 included net revenues of $774 million and a pre-tax operating loss of $519 million associated with the acquisition. The operating loss included $346 million of acquisition-related compensation expense, $261 million of inventory step-up and intangible asset amortization, and $100 million of transaction and integration costs. Of these costs, $294 million was recorded within SG&A expenses, $152 million within R&D expenses, and $261 million within cost of products sold in the consolidated statement of earnings for 2015. Pro Forma Financial Information The following table presents the unaudited pro forma combined results of operations of AbbVie and Pharmacyclics for 2015 and 2014 as if the acquisition of Pharmacyclics had occurred on January 1, 2014: years ended December 31 (in millions, except per share data) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Net revenues $ $ Net earnings $ $ Basic earnings per share $ $ Diluted earnings per share $ $ ​ ​ ​ ​ ​ ​ ​ ​ The unaudited pro forma financial information was prepared using the acquisition method of accounting and was based on the historical financial information of AbbVie and Pharmacyclics. In order to reflect the occurrence of the acquisition on January 1, 2014 as required, the unaudited pro forma financial information includes adjustments to reflect the incremental amortization expense to be incurred based on the current preliminary fair values of the identifiable intangible assets acquired; the incremental cost of products sold related to the fair value adjustments associated with acquisition-date inventory; the additional interest expense associated with the issuance of debt to finance the acquisition; and the reclassification of acquisition, integration and financing-related costs incurred during the year ended December 31, 2015 to the year ended December 31, 2014. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2014. In addition, the unaudited pro forma financial information is not a projection of the future results of operations of the combined company nor does it reflect the expected realization of any cost savings or synergies associated with the acquisition. Other Licensing & Acquisitions Activity Excluding the acquisition of Pharmacyclics, cash outflows related to other acquisitions and investments totaled $964 million, $622 million, and $405 million in 2015, 2014, and 2013, respectively. AbbVie recorded IPR&D charges of $150 million, $352 million, and $338 million in 2015, 2014, and 2013, respectively. In 2014, AbbVie also recorded other operating expenses of $750 million related to the collaboration with Calico Life Sciences LLC (Calico). Significant arrangements impacting 2015, 2014, and 2013, some of which require contingent milestone payments, are summarized below. In addition to the significant arrangements described below, AbbVie entered into several other arrangements resulting in charges to IPR&D of $50 million in 2015, $77 million in 2014, and $48 million in 2013. In connection with the other individually insignificant arrangements entered into in 2015, AbbVie could make additional payments of up to $1.2 billion upon the achievement of certain development, regulatory and commercial milestones. C 2 N Diagnostics In March 2015, AbbVie entered into an exclusive worldwide license agreement with C 2 N Diagnostics (C 2 N) to develop and commercialize anti-tau antibodies for the treatment of Alzheimer's disease and other neurological disorders. As part of the agreement, AbbVie made an initial upfront payment of $100 million, which was expensed to IPR&D in 2015. Upon the achievement of certain development, regulatory, and commercial milestones, AbbVie could make additional payments of up to $685 million, as well as royalties on net sales. Calico Life Sciences LLC In September 2014, AbbVie and 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 operating expense in the consolidated statement of earnings related to its commitments under the agreement of which $250 million was paid in 2014 and $500 million was paid in early 2015. Calico is responsible for research and early development during the first five years and will 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. In 2015, AbbVie made an additional payment of $130 million, which was recorded in R&D expense in the consolidated statement of earnings, due to the achievement of a development milestone under the collaboration agreement. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $400 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. 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. As of December 31, 2015, AbbVie will not make any additional payments pursuant to this arrangement. Other Activity United Therapeutics Corporation In August 2015, AbbVie entered into an agreement to purchase a rare pediatric disease priority review voucher (PRV) from United Therapeutics Corporation. The PRV entitles AbbVie to receive an FDA priority review of a single New Drug Application or Biologics License Application, which reduces the target review time and could lead to an expedited approval. In exchange for the PRV, AbbVie made a payment of $350 million, which was recorded in R&D expenses in the consolidated statement of earnings and as an operating cash outflow in the consolidated statement of cash flows for 2015. AbbVie intends to use the PRV for an existing R&D project. 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, and recommended stockholders vote against the proposed combination. On October 20, 2014, AbbVie and Shire mutually agreed to terminate the proposed combination. In 2014, the company incurred transaction and financing-related costs totaling $1.8 billion, of which $1.7 billion was recorded in SG&A expenses and $141 million was recorded in interest expense, net in the consolidated statement of earnings. Included in SG&A expenses was a break fee of $1.6 billion, which was 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. In the first quarter of 2015, AbbVie recorded additional foreign exchange losses of $170 million to reflect the completed liquidation of its remaining foreign currency positions. Refer to Note 10 for further information regarding these forward contracts entered into in anticipation of the proposed combination with Shire. |
Collaboration with Janssen Biot
Collaboration with Janssen Biotech, Inc. | 12 Months Ended |
Dec. 31, 2015 | |
Collaboration with Janssen Biotech, Inc. | |
Collaboration with Janssen Biotech, Inc. | Note 6 Collaboration with Janssen Biotech, Inc. In December 2011, Pharmacyclics entered into a worldwide collaboration and license agreement with Janssen for the joint development and commercialization of IMBRUVICA, a novel, orally active, selective covalent inhibitor of BTK, and certain compounds structurally related to IMBRUVICA, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States. The collaboration provides Janssen with an exclusive license to commercialize IMBRUVICA outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $200 million to AbbVie. The collaboration includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, in general, Janssen is responsible for approximately 60 percent of collaboration development costs and AbbVie is responsible for the remaining 40 percent of collaboration development costs. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Janssen is responsible for and has exclusive rights to commercialize IMBRUVICA outside the United States. While both parties have co-exclusive rights to commercialize the products in the United States, AbbVie is the principal in the end customer product sales. Operating expenses for costs incurred under the collaboration are reported in their respective expense line items, net of any payments due or reimbursements due from Janssen. Revenues and profit share costs related to sales of IMBRUVICA in the United States are included in net revenues and cost of products sold, respectively. Amounts payable to AbbVie by Janssen for IMBRUVICA sales outside the United States are included in net revenues. Janssen's share of the pre-tax profits in the United States under the collaboration was $306 million for 2015 and was recorded within cost of products sold in the consolidated statement of earnings. For 2015, AbbVie's share of pre-tax profits outside the United States and cost sharing expenses under the collaboration were $95 million and $159 million, respectively. At December 31, 2015, AbbVie's receivable from Janssen was $45 million and AbbVie's payable to Janssen was $134 million, which were classified in accounts and other receivables, net and accounts payable and accrued liabilities, respectively, in AbbVie's consolidated balance sheet. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 7 Goodwill and Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of AbbVie's goodwill: (in millions) ​ ​ ​ ​ ​ Balance as of December 31, 2013 $ Additions — Foreign currency translation and other adjustments ) ​ ​ ​ ​ ​ Balance as of December 31, 2014 Additions Foreign currency translation and other adjustments ) ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill additions in 2015 related to the acquisition of Pharmacyclics. Refer to Note 5 for additional information regarding this acquisition. The latest impairment assessment of goodwill was completed in the third quarter of 2015. As of December 31, 2015, 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: 2015 2014 as of December 31 (in millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Definite-lived intangible assets Developed product rights $ $ ) $ $ $ ) $ License agreements ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total definite-lived intangible assets ) ) Indefinite-lived research and development — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, net $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets with finite useful lives are amortized over their estimated useful lives, which range between 3 to 16 years with an average of 12 years and 11 years for developed product rights and license agreements, respectively. Additions in 2015 were primarily due to the acquisition of Pharmacyclics and those amounts will be amortized using the estimated pattern of economic benefit. Refer to Note 5 for additional information regarding this acquisition. 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 2015, 2014, and 2013 was $419 million, $403 million, and $509 million, respectively, and is included in cost of products sold in the consolidated statements of earnings. The anticipated annual amortization expense for definite lived intangible assets recorded as of December 31, 2015 is $655 million in 2016, $740 million in 2017, $894 million in 2018, $1.0 billion in 2019 and $1.1 billion in 2020. 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 was included in cost of products sold in the consolidated statement of earnings. The indefinite-lived intangible assets represent acquired IPR&D associated with products that have not yet received regulatory approval. The indefinite-lived intangible assets as of December 31, 2014 relate to IPR&D acquired in a business combination. The increase in 2015 was primarily due to the acquisition of Pharmacyclics. The latest impairment assessment of intangible assets not subject to amortization was completed in the third quarter of 2015. No impairment charges were recorded in 2015. Impairment charges recorded in 2014 related to indefinite-lived intangible assets were not material. Future impairment tests for indefinite-lived intangible assets will be performed annually in the third quarter, or earlier if indicators of impairment exist. |
Restructuring Plans
Restructuring Plans | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring Plans | |
Restructuring Plans | Note 8 Restructuring Plans AbbVie continuously evaluates its operations to identify opportunities to optimize its manufacturing and R&D operations, commercial infrastructure, and administrative costs and to respond to changes in its business environment, for example, in conjunction with the loss and expected loss of exclusivity of certain products. As a result, AbbVie management periodically approves individual restructuring plans to achieve these objectives. In 2015, 2014 and 2013, no such plans were individually material. Restructuring charges recorded in 2015, 2014 and 2013 were $138 million, $23 million, $83 million, respectively, and were primarily related to employee severance and contractual obligations. These charges were recorded in cost of products sold, R&D expenses, and SG&A expenses in the consolidated statements of earnings based on classification of the affected employees or operations. The following summarizes the cash activity in the restructuring reserve for 2015, 2014 and 2013: (in millions) ​ ​ ​ ​ ​ Accrued balance at December 31, 2012 $ 2013 restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2013 2014 restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 2015 restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. |
Debt, Credit Facilities, and Co
Debt, Credit Facilities, and Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 AbbVie's long-term debt: as of December 31 (in millions) Effective interest rate in 2015 (a) 2015 Effective interest rate in 2014 (a) 2014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior notes issued in 2012: Floating rate notes due 2015 % $ — % $ 1.2% notes due 2015 % — % 1.75% notes due 2017 % % 2.0% notes due 2018 % % 2.9% notes due 2022 % % 4.4% notes due 2042 % % Senior notes issued in 2015: 1.8% notes due 2018 % — — 2.5% notes due 2020 % — — 3.2% notes due 2022 % — — 3.6% notes due 2025 % — — 4.5% notes due 2035 % — — 4.7% notes due 2045 % — — Term loan facilities: Floating rate notes due 2016 % — — Floating rate notes due 2018 % — — Other — — Fair value hedges — ) — ) Unamortized bond discounts — ) — ) Unamortized deferred financing costs — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt and lease obligations Current portion ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent portion $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Excludes the effect of any related interest rate swaps. On September 25, 2015, AbbVie entered into a $2 billion three-year term loan credit agreement and a $2 billion 364-day term loan credit agreement (collectively, the term loan facilities). In November 2015, AbbVie drew on these term loan facilities and used the proceeds to refinance its $4 billion of senior notes that matured in November 2015. The borrowings under the term loan facilities bear interest at variable rates which will adjust based on AbbVie's public debt ratings. The term loan facilities may be prepaid without penalty upon prior notice and contain customary covenants, all of which the company was in compliance with as of December 31, 2015. In May 2015, the company issued $16.7 billion aggregate principal amount of unsecured senior notes. The senior notes rank equally with all other unsecured and unsubordinated indebtedness of the company. AbbVie may redeem the senior notes prior to maturity at a redemption price equal to the principal amount of the senior notes redeemed plus a make-whole premium and, except for the 1.8% notes due 2018, AbbVie may redeem the senior notes at par between one and six months prior to maturity. Debt issuance costs incurred in connection with the offering totaled $93 million and are being amortized over the respective terms of the senior notes to interest expense, net in the consolidated statements of earnings. The senior notes contain customary covenants, all of which the company was in compliance with as of December 31, 2015. Approximately $11.5 billion of the net proceeds from the issuance of the senior notes were used to finance the acquisition of Pharmacyclics and approximately $5.0 billion of the net proceeds were used to finance the ASR with Morgan Stanley. Refer to Notes 5 and 12 for additional information related to the acquisition of Pharmacyclics and the ASR, respectively. In March 2015, AbbVie entered into an $18 billion, 364-Day Bridge Term Loan Credit Agreement (the bridge loan) in support of the then planned acquisition of Pharmacyclics. No amounts were drawn under the bridge loan, which was terminated as a result of the company's May 2015 issuance of the senior notes. Interest expense, net in 2015 include $86 million of costs related to the bridge loan. AbbVie has outstanding $10.7 billion aggregate principal amount of unsecured senior notes which were issued in 2012. AbbVie may redeem all of the senior notes of each series, at any time, and some of the senior notes of each series, from time to time, at a redemption price equal to the principal amount of the senior notes redeemed plus a make-whole premium. At December 31, 2015, the company was in compliance with its senior note covenants. Short-Term Borrowings At December 31, 2015 and 2014, short-term borrowings included $400 million and $416 million, respectively, of commercial paper borrowings. The weighted-average interest rate on short-term borrowings was 0.3 percent and 0.2 percent for 2015 and 2014, respectively. In October 2014, AbbVie entered into a $3.0 billion five-year revolving credit facility, which matures in October 2019 and replaced a $2.0 billion five-year revolving credit facility. The revolving credit facility enables the company to borrow funds on an unsecured basis at variable interest rates and contains various covenants. At December 31, 2015, the company was in compliance with all its credit facility covenants. Commitment fees under AbbVie's revolving credit facilities were not material in 2015, 2014 and 2013. No amounts were outstanding under the credit facility as of December 31, 2015 and December 31, 2014. Maturities of Long-Term Debt and Capital Lease Obligations The following table summarizes AbbVie's future minimum lease payments under non-cancelable operating leases and debt maturities and future minimum lease payments for capital lease obligations as of December 31, 2015: as of and for the years ended December 31 (in millions) Operating leases Debt maturities and capital leases ​ ​ ​ ​ ​ ​ ​ ​ 2016 $ $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ ​ ​ ​ Total obligations and commitments Fair value hedges and unamortized bond discounts and deferred financing costs — ) ​ ​ ​ ​ ​ ​ ​ ​ Total debt and lease obligations $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease expense was $146 million in 2015, $115 million in 2014, and $107 million in 2013. 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. As of December 31, 2015, annual future minimum lease payments for capital lease obligations are not material. Debt maturities and capital leases in 2016 include the $2.0 billion floating rate notes due in 2016 drawn under the 364-day term loan credit agreement. 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 future events. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 12 Months Ended |
Dec. 31, 2015 | |
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 $1.5 billion and $1.4 billion at December 31, 2015 and December 31, 2014, respectively, are designated as cash flow hedges and are recorded at fair value. Resulting gains or losses are reflected in OCI. Accumulated gains and losses as of December 31, 2015 will be reclassified from AOCI and included in cost of products sold at the time the products are sold, generally not exceeding twelve months. The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are reflected in net foreign exchange loss in the consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. At December 31, 2015 and December 31, 2014, AbbVie held notional amounts of $6.8 billion and $6.8 billion, respectively, of such undesignated foreign currency forward exchange contracts. In 2014, the company entered into undesignated forward exchange 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 were originally due to mature 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 losses associated with the Shire-related forward exchange contracts. AbbVie is a party to interest rate hedge contracts, designated as fair value hedges, totaling $11.0 billion and $8.0 billion at December 31, 2015 and December 31, 2014, respectively. 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 in the consolidated balance sheets: Fair value—Derivatives in asset position Fair value—Derivatives in liability position as of December 31 (in millions) 2015 2014 Balance sheet caption 2015 2014 Balance sheet caption ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency forward exchange contracts— Hedging instruments $ $ Prepaid expenses and other $ — $ — Accounts payable and accrued liabilities Others not designated as hedges Prepaid expenses and other Accounts payable and accrued liabilities Interest rate swaps designated as fair value hedges — Prepaid expenses and other Other long-term liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 unrealized gains/(losses) for the effective portions of the derivative instruments designated as cash flow hedges recognized in OCI were $122 million, $193 million and ($77) million for 2015, 2014, and 2013, respectively. The amount of hedge ineffectiveness was not significant for any of the years presented. The following table summarizes the pre-tax amounts and location in the consolidated statements of earnings of net gains/(losses) recognized in the consolidated statements of earnings for derivative instruments, including the effective portions of the net gains/(losses) reclassified out of AOCI into net earnings for 2015, 2014, and 2013, respectively. See Note 12 for the amount of net gains/(losses) reclassified out of AOCI. years ended December 31 (in millions) 2015 2014 2013 Statement of earnings caption ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency forward exchange contracts— Designated as cash flow hedges $ $ ) $ — Cost of products sold Not designated as hedges ) ) Net foreign exchange loss Interest rate swaps designated as fair value hedges ) Interest expense, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The gain/(loss) related to fair value hedges is recognized in interest expense, net in the consolidated statements of earnings and directly offsets the (loss)/gain on the underlying hedged item, the fixed-rate debt, resulting in no net impact to interest expense, net for all periods presented. 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, 2015: Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Cash and equivalents $ $ $ $ — Time deposits — — Equity securities — — Interest rate hedges — — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Interest rate hedges $ $ — $ $ — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Cash and equivalents $ $ $ $ — Time deposits — — Equity securities — — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Interest rate hedges $ $ — $ $ — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 values are 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. Cumulative net unrealized holding gains on available-for-sale equity securities totaled $47 million and $3 million at December 31, 2015 and December 31, 2014, respectively. There have been no transfers of assets or liabilities between the fair value measurement levels. 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 are summarized in the table below: Book values Approximate fair values as of December 31 (in millions) 2015 2014 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Investments $ $ $ $ Liabilities Short-term borrowings $ $ $ $ Current portion of long-term debt and lease obligations $ $ $ $ Long-term debt and lease obligations, excluding fair value hedges $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of December 31, 2015: Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Investments $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Short-term borrowings $ $ — $ $ — Current portion of long-term debt and lease obligations — — Long-term debt and lease obligations, excluding fair value hedges — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Investments $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Short-term borrowings $ $ — $ $ — Current portion of long-term debt and lease obligations — Long-term debt and lease obligations, excluding fair value hedges — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investments consist of cost method investments and held-to-maturity debt securities. To determine the fair values 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 values of long-term debt, excluding fair value hedges and the term loans, were 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 fair values of the term loans were determined based on a discounted cash flow analysis using quoted market rates, which represents a Level 2 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 and money market funds 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. The functional currency of the company's Venezuela operations is the U.S. dollar due to the hyperinflationary status of the Venezuelan economy. Currency restrictions enacted in Venezuela require approval from the Venezuelan government to exchange Venezuelan bolivars (VEF) for U.S. dollars and require such exchange to be made at the official exchange rate established by the government. In the first quarter of 2014, the Venezuelan government expanded the number of exchange mechanisms to three rates of exchange. As of December 31, 2015, these were the official rate of 6.3; the Supplementary System for the Administration of Foreign Currency (SICAD) rate of approximately 13.5; and the Foreign Exchange Marginal System (SIMADI) rate of approximately 200. In the consolidated financial statements as of and for the year ended December 31, 2015, the company used the official rate of 6.3 VEF per U.S. dollar, and reported $317 million of net monetary assets and $210 million of net revenues denominated in the Venezuelan bolivar. On February 17, 2016, the Venezuelan government announced that it plans to devalue the official rate of 6.3 to 10 VEF to U.S. dollars, and eliminate the SICAD rate of 13.5 VEF to U.S. dollars. The devaluation of the Venezuelan bolivar will result in a charge to AbbVie's results of operations in the first quarter of 2016. If AbbVie's net monetary assets denominated in the Venezuelan bolivar had been converted at a rate of 10 VEF to U.S. dollars at December 31, 2015, the company would have reported a devaluation loss of $117 million in 2015. If AbbVie's net monetary assets denominated in the Venezuelan bolivar had been converted at the SIMADI rate of 200 at December 31, 2015, the company would have reported a devaluation loss of $307 million in 2015. The company cannot predict whether there will be further devaluations of the Venezuelan currency or whether the use of the official rate will continue to be supported by evolving facts and circumstances, which could result in a significant charge to AbbVie's results of operations at that time. The company also continues to do business with foreign governments in certain oil-exporting countries, including Venezuela and Saudi Arabia, which have experienced a deterioration in economic conditions. Due to the decline in the price of oil, liquidity issues in certain countries may result in delays in the collection of receivables. Three U.S. wholesalers accounted for 51 percent and 49 percent of total net accounts receivable as of December 31, 2015 and December 31, 2014, respectively, and substantially all of AbbVie's net revenues in the United States are to these three wholesalers. In addition, net governmental receivables outstanding in Greece, Portugal, Italy and Spain totaled $525 million at December 31, 2015 and $446 million at December 31, 2014. HUMIRA (adalimumab) is AbbVie's single largest product and accounted for approximately 61 percent, 63 percent, and 57 percent of AbbVie's total net revenues in 2015, 2014, and 2013, respectively. |
Post-Employment Benefits
Post-Employment Benefits | 12 Months Ended |
Dec. 31, 2015 | |
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 retirees in the United States and Puerto Rico, through other post-retirement benefit plans. Net obligations for these plans have been reflected in the consolidated balance sheets as of December 31, 2015 and 2014. AbbVie's principal domestic defined benefit plan is the AbbVie Pension Plan. AbbVie employees who were eligible to participate in the Abbott pension 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 AbbVie employees from Abbott. AbbVie made voluntary contributions of $150 million, $370 million, and $145 million in 2015, 2014, and 2013 respectively, to this plan. AbbVie also made a voluntary contribution of $150 million to this plan subsequent to December 31, 2015. The benefit plan information in the table below pertains to the global AbbVie-sponsored defined benefit and other post-employment plans: Defined benefit plans Other post-employment plans as of and for the years ended December 31 (in millions) 2015 2014 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations Beginning of period $ $ $ $ Service cost Interest cost Employee contributions — — Plan amendments — — ) Actuarial (gain) loss ) ) Benefits paid ) ) ) ) Other, primarily foreign currency translation adjustments ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ End of period ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets Beginning of period — — Actual (loss) return on plan assets ) — — Company contributions Employee contributions — — Benefits paid ) ) ) ) Other, primarily foreign currency translation adjustments ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ End of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status end of period $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized in the consolidated balance sheets Other non-current assets $ $ $ — $ — Accounts payable and accrued liabilities ) ) ) ) Other long-term liabilities ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net obligation $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actuarial losses, net $ $ $ $ Prior service cost ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated other comprehensive loss at December 31 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The projected benefit obligations (PBO) in the table above included $1.5 billion and $1.4 billion at December 31, 2015 and 2014, respectively, related to international defined benefit plans, a number of which generally are not funded as permitted by local regulations. Benefit payments under those plans are funded from company assets. AbbVie considered the release of the new mortality tables and projection scales by the Society of Actuaries in 2014 and determined they were an improvement of the estimate of future mortality and opted to change to the new tables in determining the funded status as of December 31, 2014. In 2015, the Society of Actuaries released an improvement scale that adjusted the previously issued 2014 scale which AbbVie determined was appropriate to utilize in determining the funded status as of December 31, 2015. For plans reflected in the table above, the accumulated benefit obligations (ABO) were $4.8 billion and $5.0 billion at December 31, 2015 and 2014, respectively. For those plans reflected in the table above in which the ABO exceeded plan assets at December 31, 2015, the ABO, PBO and aggregate plan assets were $3.1 billion, $3.6 billion and $2.2 billion, respectively. Amounts Recognized in Accumulated Other Comprehensive Loss and Other Comprehensive (Loss) Income The defined benefit and other post-employment plans' actuarial (gains) or losses and prior service costs or (credits) not yet recognized in net periodic benefit cost are included in AOCI, net of tax, and will be amortized to net periodic benefit cost in future periods. The following table summarizes the pre-tax gains and losses included in other comprehensive (loss) income: years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Actuarial (gain) loss $ ) $ $ ) Prior service cost — Amortization of actuarial losses and prior service costs ) ) ) Foreign exchange (gain) loss ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total pre-tax (gain) loss recognized in other comprehensive (income) loss $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other post-employment plans Actuarial (gain) loss $ ) $ $ ) Prior service cost — ) ) Amortization of actuarial losses and prior service costs ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total pre-tax (gain) loss recognized in other comprehensive (income) loss $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The pre-tax amount of actuarial loss and prior service cost included in AOCI at December 31, 2015 that is expected to be recognized in net periodic benefit cost in 2016 is $87 million for defined benefit plans and $1 million for other post-employment plans. Net Periodic Benefit Cost years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Service cost $ $ $ Interest cost Expected return on plan assets ) ) ) Amortization of actuarial losses and prior service costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other post-employment plans Service cost $ $ $ Interest cost Amortization of actuarial (gain) loss and prior service costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date as of December 31 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Discount rate % % Rate of compensation increases % % Other post-employment plans Discount rate % % ​ ​ ​ ​ ​ ​ ​ ​ The assumptions used in calculating the December 31, 2015 measurement date benefit obligations will be used in the calculation of net periodic benefit cost in 2016. Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost years ended December 31 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Discount rate % % % Expected long-term rate of return on plan assets % % % Expected rate of change in compensation % % % Other post-employment plans Discount rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective December 31, 2015, AbbVie elected to change the method it uses to estimate the service and interest cost components of net periodic benefit costs for the AbbVie Pension Plan and its primary other post-employment benefit plan in the United States as well as certain international defined benefit plans and other post-employment benefit plans. Historically, AbbVie estimated these service and interest cost components of this expense utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. In late 2015, AbbVie elected to utilize a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. AbbVie elected to make this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. AbbVie has accounted for this change prospectively as a change in accounting estimate that is inseparable from a change in accounting principle. Based on current economic conditions, this change is expected to reduce AbbVie's net periodic benefit cost by approximately $41 million in 2016. This change had no effect on the 2015 expense and will not affect the measurement of AbbVie's total benefit obligations as the change in service cost and interest cost will be completely offset in the actuarial (gain) loss reported. For 2015, for purposes of measuring post-retirement health care obligations as of the measurement date, the company assumed a 7.3 percent pre-65 (8.3 percent 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 percent in 2064 and remain at that level thereafter. For purposes of measuring post-retirement health care costs, the company assumed a 7.5 percent pre-65 (7.3 percent 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 percent for 2064 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, 2015, a 1 percentage point change in assumed health care cost trend rates would have the following effects: One percentage point year ended December 31, 2015 (in millions) (brackets denote a reduction) Increase Decrease ​ ​ ​ ​ ​ ​ ​ ​ Service cost and interest cost $ $ ) Projected benefit obligation $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ Defined Benefit Pension Plan Assets Basis of fair value measurement as of December 31 (in millions) 2015 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities U.S. government securities (d) — Corporate debt instruments (d) Non-U.S. government securities (d) — Other (d) — Absolute return funds (e) Real assets Other (f) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis of fair value measurement as of December 31 (in millions) 2014 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities U.S. government securities (d) — — Corporate debt instruments (d) — Non-U.S. government securities (d) — Other (d) — Absolute return funds (e) Real assets — Other (f) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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) 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. (f) 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): as of and for the years ended December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Beginning of period $ $ Actual return on plan assets on hand at end of period Purchases, sales and settlements, net ​ ​ ​ ​ ​ ​ ​ ​ End of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 35 percent in equity securities, 20 percent in fixed income securities and 45 percent 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 plan assets assumption, 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 Defined Benefit and Other Post-Employment Plan Payments years ended December 31 (in millions) Defined benefit plans Other post-employment plans ​ ​ ​ ​ ​ ​ ​ ​ 2016 $ $ 2017 $ $ 2018 $ $ 2019 $ $ 2020 $ $ 2021 to 2025 $ $ ​ ​ ​ ​ ​ ​ ​ ​ 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 AbbVie's principal defined contribution plan is the AbbVie Savings Plan. AbbVie recorded expense of $73 million in 2015, $67 million in 2014, and $62 million in 2013 related to this plan. AbbVie provides certain other post-employment benefits, primarily salary continuation arrangements, to qualifying employees and accrues for the related cost over the service lives of the employees. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity | |
Equity | Note 12 Equity Stock-Based Compensation Stock-based compensation expense was $282 million, $241 million, and $212 million in 2015, 2014, and 2013, respectively, and is principally classified in SG&A for all periods presented, with the remainder classified in R&D expenses and cost of products sold. The related tax benefit recognized in 2015, 2014, and 2013 was $89 million, $73 million, and $68 million, respectively. 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. Retirement eligible employees are generally those that are age 55 and have at least ten years of 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 2015, 2014, and 2013, realized excess tax benefits associated with stock-based compensation and recorded in additional paid-in capital totaled $61 million, $56 million, and $38 million, respectively, and were presented in the consolidated statements of cash flows as an outflow in operating activities and an inflow in financing activities. Stock Options The exercise price for options granted is at least equal to 100 percent of the fair 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 stock options granted were $9.96, $9.83, and $6.87 in 2015, 2014, and 2013, 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 in 2015: year ended December 31 (options in thousands, aggregate intrinsic value in millions) Options Weighted- average exercise price Weighted- average remaining life (in years) Aggregate intrinsic value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at beginning of period $ $ Granted Exercised ) Lapsed ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at end of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The aggregate intrinsic value in the table above represents the difference between the exercise price and the company's closing share price on the last day of trading in 2015. The total intrinsic value of options exercised in 2015, 2014 and 2013 was $216 million, $253 million, and $229 million respectively. The total fair value of options vested during 2015 was $10 million. RSAs & RSUs RSAs and RSUs generally vest in one-third increments over three years. Upon vesting, the recipient receives one share of common stock for each vested award. AbbVie grants performance-based RSAs and RSUs to selected executives and other key employees with vesting primarily contingent upon 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 AbbVie's common stock on the date of grant. For purposes of determining compensation expense, AbbVie periodically evaluates whether the performance goals will be achieved. If such goals are not met, no compensation expense is recognized and any previously recognized compensation expense is reversed. The following table summarizes AbbVie RSA and RSU activity (including performance-based awards) for both AbbVie and Abbott employees for 2015: year ended December 31 (share units in thousands) Share units Weighted-average grant date fair value ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at beginning of period $ Granted Vested ) Lapsed ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of period $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair market value of RSAs and RSUs vested in 2015, 2014 and 2013 was $335 million, $338 million and $285 million, respectively. As of December 31, 2015, $239 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 February 13, May 15, August 14 and November 16, 2015, AbbVie paid quarterly cash dividends of $0.49, $0.51, $0.51 and $0.51 per share of common stock, respectively, which were declared by the board of directors on October 20, 2014 and February 19, June 18, and September 11, 2015 respectively. The dividends declared on October 20, 2014 and February 19, 2015, represented an increase of nearly 17 percent and approximately 4 percent, respectively, over the previous quarterly rates of $0.42 per share and $0.49 per share, respectively. On October 30, 2015, the company announced that its board of directors declared an increase in the company's quarterly cash dividend from $0.51 per share to $0.57 per share beginning with the dividend payable on February 16, 2016 to stockholders of record as of January 15, 2016. This reflects an increase of approximately 12 percent over the previous quarterly rate. On February 14, May 15, August 15, and November 17, 2014, AbbVie paid quarterly cash dividends of $0.40, $0.42, $0.42 and $0.42 per share of common stock, respectively, which were declared by the board of directors on December 12, 2013 and February 20, June 19, and September 19, 2014, respectively. 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 superseded the previous authorization. The current 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 program has no time limit and can be discontinued at any time. In March 2015, the board of directors authorized a $5.0 billion increase to the existing stock repurchase program in anticipation of executing an accelerated share repurchase agreement in connection with the acquisition of Pharmacyclics. On May 26, 2015, AbbVie entered into and executed the $5.0 billion ASR with Morgan Stanley. Pursuant to the terms of ASR, Morgan Stanley made an initial delivery of approximately 68 million shares of AbbVie's common stock on May 27, 2015, which represented approximately 90 percent of the total shares expected to be delivered under the ASR. Morgan Stanley subsequently delivered an additional 5 million shares of AbbVie's common stock to AbbVie in final settlement of the ASR in 2015. AbbVie recorded the aggregate $5.0 billion purchase price as a reduction to common stock held in treasury in the consolidated balance sheet as of December 31, 2015. In addition to the ASR, AbbVie repurchased approximately 46 million shares, 9 million shares, and 4 million shares for $2.8 billion, $550 million, and $223 million in 2015, 2014 and 2013, respectively, in the open market. AbbVie settled $300 million of its 2015 open market purchases in 2016. Shares repurchased under these programs are recorded at acquisition cost, including related expenses, and are available for general corporate purposes. AbbVie's remaining share repurchase authorization was $1.9 billion as of December 31, 2015. Accumulated Other Comprehensive Loss The following table summarizes the changes in each component of AOCI, net of tax, for 2015, 2014 and 2013: (in millions) (brackets denote losses) Foreign currency translation adjustments Pension and post- employment benefits Unrealized gains (losses) on marketable equity securities Hedging activities Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2012 $ $ ) $ $ ) $ ) Other comprehensive income (loss) before reclassifications ) Net losses reclassified from accumulated other comprehensive loss — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive income (loss) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Separation-related adjustments ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2013 ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income before reclassifications ) ) ) Net losses reclassified from accumulated other comprehensive loss — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2014 ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income before reclassifications ) ) Net losses (gains) reclassified from accumulated other comprehensive loss — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ) $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 foreign currencies accumulated in anticipation of the terminated proposed combination with Shire plc. Other comprehensive loss in 2015 includes foreign currency translation adjustments totaling a loss of $667 million, which was principally driven by the impact of the continued weakening of the Euro on the translation of the company's Euro-denominated assets. The table below presents the impact on AbbVie's consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss: years ended December 31 (in millions) (brackets denote gains) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension and post-employment benefits Amortization of actuarial losses and other (a) $ $ $ Less tax benefit ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications, net of tax $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hedging activities (Gains) losses on designated cash flow hedges (b) $ ) $ $ — Less tax expense (benefit) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications, net of tax $ ) $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Amounts are included in the computation of net periodic benefit cost (see Note 11). (b) Amounts are included in cost of products sold (see Note 10). 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, 2015, no shares of preferred stock were issued or outstanding. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 13 Income Taxes Earnings Before Income Tax Expense years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic $ ) $ ) $ ) Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total earnings before income tax expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The domestic loss before income taxes in 2014 was driven by transaction and financing-related costs associated with the terminated proposed combination with Shire. Refer to Note 5 for further information. Income Tax Expense years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Domestic $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred Domestic $ $ ) $ Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred taxes $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective Tax Rate Reconciliation years ended December 31 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Statutory tax rate % % % State taxes, net of federal benefit — Effect of foreign operations ) ) ) U.S. tax credits ) ) ) Branded prescription drug fee Valuation allowances ) All other, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 rates in 2015, 2014 and 2013 differed 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 rates for these periods also reflected 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 credits for 2015 and 2014 were due to legislation enacted in the fourth quarter of each year that retroactively extended the credit. The Puerto Rico excise tax credits relate to legislation enacted by Puerto Rico 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. The effective income tax rate in 2015 included a tax benefit of $103 million from a reduction of state valuation allowances. The effective tax rate in 2014 included additional expenses of $129 million related to the Branded Prescription Drug Fee, which is non-deductible, and state valuation allowances of $129 million. 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 2015, 2014 and 2013 reflects income tax expenses relating to current earnings outside the United States that are not deemed indefinitely reinvested. Deferred Tax Assets and Liabilities as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets Compensation and employee benefits $ $ Accruals and reserves Chargebacks and rebates Deferred revenue Depreciation Net operating losses and other credit carryforwards Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowances ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities Excess of book basis over tax basis of intangible assets ) ) Excess of book basis over tax basis in investments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax (liabilities) assets $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The increases in the deferred tax liabilities are primarily due to the acquisition of Pharmacyclics in which AbbVie recorded the excess of book basis over tax basis of intangible assets and investments. Gross federal net operating loss and tax credit carryforwards as of December 31, 2015 were $293 million and $147 million, respectively, and are available for use through 2035. Gross state net operating loss and tax credit carryforwards as of December 31, 2015 were $1.3 billion and $152 million, respectively. The state tax carryforwards expire between 2017 and 2035. As of December 31, 2015, foreign net operating loss carryforwards were $232 million. Foreign net operating loss carryforwards of $177 million expire between 2018 and 2023, and the remaining do not have an expiration period. As of December 31, 2015 and 2014, the company had valuation allowances of $70 million and $172 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 $25 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) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1 $ $ $ Increase due to current year tax positions Increase due to prior year tax positions — Decrease due to prior year tax positions ) ) — Lapse of statutes of limitations ) ) — Separation-related adjustments — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. 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. 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. If recognized, the net amount of potential tax benefits that would impact the company's effective tax rate is $901 million and $389 million in 2015 and 2014, respectively. Of the unrecognized tax benefits recorded in the table above as of December 31, 2015, AbbVie would be indemnified for approximately $107 million. The "Increase due to prior year tax positions" in the table above includes amounts relating to federal, state, and international items as well as prior positions acquired through business development activities during the year. Uncertain tax positions are generally included as a long-term liability on the consolidated balance sheets. AbbVie recognizes interest and penalties related to income tax matters in income tax expense. In 2015, 2014, and 2013, AbbVie recognized gross income tax expense of $13 million, $10 million, and $3 million, respectively, for interest and penalties related to income tax matters. At December 31, 2015, 2014, and 2013, AbbVie had $83 million, $25 million, and $15 million accrued for the payment of gross interest and penalties. 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 $15 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. |
Legal Proceedings and Contingen
Legal Proceedings and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Legal Proceedings and Contingencies | |
Legal Proceedings and Contingencies | Note 14 Legal Proceedings and Contingencies AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management's best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation at December 31, 2015 was $166 million and at December 31, 2014 was not significant. Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie's consolidated financial position, results of operations or cash flows. Subject to certain exceptions specified in the separation agreement by and between Abbott and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business but were discontinued prior to the 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. 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 are consolidated for pre-trial purposes in the United States District Court for the Northern District of Georgia under the Multi-District Litigation (MDL) 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 No. 2084 includes: (a) four individual plaintiff lawsuits; (b) six purported class actions; and (c) Federal Trade Commission v. Watson Pharmaceuticals, Inc. et al. 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. The Attorney General of the State of Alaska has served AbbVie with a Civil Investigative Demand, primarily seeking documents that AbbVie produced in these lawsuits. In November 2007, GlaxoSmithKline plc (GSK) filed a lawsuit against Abbott in the United States District Court for the Northern District of California alleging that Abbott violated federal antitrust and various state 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 GSK. In January 2014, 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 was returned to the district court in California, but after GSK dismissed its federal antitrust claims, the case was transferred in April 2015 to the United States District Court for the Middle District of North Carolina, where pre-trial proceedings are pending. AbbVie assumed the liability for and control of this proceeding in connection with its separation from Abbott. Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie) and a generic company violates federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. The lawsuits consist of three individual plaintiff lawsuits and two consolidated purported class actions: one brought by three named direct purchasers of Niaspan and the other brought by ten named end-payor purchasers of Niaspan. The cases are consolidated for pre-trial proceedings in the United States District Court for the Eastern District of Pennsylvania under the MDL Rules as In re: Niaspan Antitrust Litigation , MDL No. 2460. The office of the Attorney General of the State of Alaska has served AbbVie with a Civil Investigative Demand, primarily seeking documents that AbbVie produced in this lawsuit. In September 2014, the FTC filed suit in the United States District Court for the Eastern District of Pennsylvania against AbbVie and others, alleging that the 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 May 2015, the court dismissed the FTC's claim regarding the patent litigation settlement. The office of the Attorney General of the State of Alaska has served AbbVie with a Civil Investigative Demand, primarily seeking documents that AbbVie produced in this lawsuit. In March 2015, the State of Louisiana filed a lawsuit, State of Louisiana v. Fournier Industrie et Sante, et al. , against AbbVie, Abbott and affiliated Abbott entities in Louisiana state court. Plaintiff alleges that patent applications and patent litigation filed and other alleged conduct from the early 2000's and before related to the drug TriCor violated Louisiana state antitrust and unfair trade practices laws. The lawsuit seeks monetary damages and attorneys' fees. In August 2015, the court dismissed the case as time-barred. The state's appeal of that dismissal is pending. 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 Racketeer Influenced and Corrupt Organizations (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. 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 RICO Act and state consumer fraud and deceptive trade practices laws. The complaint seeks monetary damages and injunctive relief. A similar lawsuit, Allied Services Division Welfare Fund v. AbbVie Inc., et al. , was filed in the same court in October 2015 on behalf of the same putative class members and a putative class of consumers. Product liability cases are pending in which plaintiffs generally allege that AbbVie and other manufacturers of TRTs did not adequately warn about risks of certain injuries, primarily heart attacks, strokes and blood clots. Approximately 2,500 claims are consolidated for pre-trial purposes in the United States District Court for the Northern District of Illinois under the MDL Rules as In re: Testosterone Replacement Therapy Products Liability Litigation , MDL No. 2545. Approximately 170 claims are pending in various state courts. Plaintiffs seek compensatory and punitive damages. Product liability cases are pending in which plaintiffs generally allege that AbbVie did not adequately warn about risk of certain injuries, primarily various birth defects, arising from use of Depakote. Over ninety percent of the approximately 715 claims are pending in the United States District Court for the Southern District of Illinois, and the rest are pending in various other federal and state courts. Plaintiffs seek compensatory and punitive damages. In November 2014, five individuals filed a putative class action lawsuit on behalf of purchasers and sellers of certain Shire 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 monetary damages 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 approval and termination of AbbVie's proposed transaction with Shire. The lawsuit seeks monetary damages for AbbVie, among other relief. |
Segment and Geographic Area Inf
Segment and Geographic Area Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment and Geographic Area Information | |
Segment and Geographic Area Information | Note 15 Segment and Geographic Area Information AbbVie operates in one business segment—pharmaceutical products. Substantially all of AbbVie's net revenues in the United States are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served. The following tables detail AbbVie's worldwide net revenues: years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HUMIRA $ $ $ IMBRUVICA — — VIEKIRA — Creon Synagis Lupron Synthroid Kaletra AndroGel Sevoflurane Duodopa Dyslipidemia products All other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net revenues $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net revenues to external customers by geographic area, based on product shipment destination, were as follows: years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States $ $ $ Germany United Kingdom Spain Japan France Canada Italy Brazil The Netherlands All other countries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net revenues $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-lived assets include net property and equipment of $2.6 billion and $2.5 billion as of December 31, 2015 and 2014, of which $1.9 billion and $1.8 billion, respectively, was located in the United States and Puerto Rico and $513 million and $551 million, respectively, was located in Europe. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data (unaudited) | |
Quarterly Financial Data (unaudited) | Note 16 Quarterly Financial Data (unaudited) (in millions except per share data) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ First Quarter Net revenues $ $ Gross margin $ $ Net earnings (a) $ $ Basic earnings per share $ $ Diluted earnings per share $ $ Cash dividends declared per common share $ $ Second Quarter Net revenues $ $ Gross margin $ $ Net earnings (b) $ $ Basic earnings per share $ $ Diluted earnings per share $ $ Cash dividends declared per common share $ $ Third Quarter Net revenues $ $ Gross margin $ $ Net earnings (c) $ $ Basic earnings per share $ $ Diluted earnings per share $ $ Cash dividends declared per common share $ $ Fourth Quarter Net revenues (d) $ $ Gross margin (d) $ $ Net earnings (loss) (e) $ $ ) Basic earnings (loss) per share $ $ ) (f) Diluted earnings (loss) per share $ $ ) (f) Cash dividends declared per common share $ $ ​ ​ ​ ​ ​ ​ ​ ​ (a) Results for the first quarter of 2015 included after-tax foreign exchange losses of $170 million related to the liquidation in 2015 of remaining foreign currency positions related to the terminated proposed combination with Shire in 2014, a $100 million after-tax charge as a result of entering into an exclusive worldwide license agreement with C 2 N and after-tax costs of $41 million incurred in connection with the with the acquisition of Pharmacyclics. (b) Second quarter results for 2015 included after-tax costs totaling $215 million incurred in connection with the acquisition and integration of Pharmacyclics. In 2014, second quarter results included an after-tax charge of $40 million related to a regulatory milestone made to a collaboration partner for regulatory milestones related to the company's HCV program. (c) Results for the third quarter of 2015 included a $350 million after-tax charge related to the purchase of a rare pediatric disease PRV from United Therapeutics Corporation, after after-tax costs totaling $85 million incurred in connection with the acquisition and integration of Pharmacyclics, and an $83 million after-tax charge due to the achievement of a development milestone under the global collaboration with Infinity. In 2014, third quarter results included a $173 million after-tax charge as a result of entering into a global collaboration with Infinity, a $250 million after-tax charge related to a research and development collaboration agreement with Calico, and transaction and financing-related and other costs aggregating $172 million after-tax that were incurred in connection with the terminated proposed combination with Shire. Refer to Note 5 for further information relating to the termination of the proposed combination with Shire and the collaborations with Calico and Infinity. (d) Net revenues and gross margin in 2015 included milestone revenue of $40 million from a collaboration partner related the company's oncology program. Net revenues and gross margin in 2014 include royalty income of $81 million relating to prior periods as a result of the settlement of a licensing arrangement. (e) Fourth quarter results for 2015 included after-tax costs totaling $68 million incurred in connection with the acquisition and integration of Pharmacyclics and after-tax charges of $101 million to increase the company's litigation reserves. For 2014, results for the fourth quarter included after-tax transaction and financing-related and other costs incurred in connection with the terminated proposed combination with Shire aggregating $1.6 billion and a $500 million after-tax charge related to the research and development collaboration agreement with Calico. (f) 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 Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 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, 2015 and 2014 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 expense (income), net in the consolidated statements of earnings. 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 revenues are recorded. Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer. For each type of rebate, the factors used in the calculations of the accrual for that rebate include the identification of the products subject to the rebate, the applicable price terms, and the estimated lag time between sale and payment of the rebate, which can be significant. 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 revenues. 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 Expenses | Research and Development Expenses Internal research and development (R&D) expenses 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 as intangible assets and amortized to cost of products sold over the remaining useful life of the related product. |
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) expenses in the consolidated statements of earnings. Subsequent payments made to the partner for the achievement of milestones during the development stage are expensed to R&D expenses in the consolidated statements of earnings 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 to cost of products sold in the consolidated statements of earnings when incurred. |
Advertising | Advertising Costs associated with advertising are expensed as incurred and are included in SG&A expenses in the consolidated statements of earnings. Advertising expenses were $704 million, $665 million, and $626 million in 2015, 2014, and 2013, respectively. |
Pension and Other Post-Employment Benefits | Pension and Other 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 periodic benefit cost over a five-year period. |
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. |
Cash and Equivalents | Cash and Equivalents Cash and equivalents include time deposits and money market funds 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 securities. 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 (AOCI) 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, a cost basis investment is written down with a charge to other expense (income), net in the consolidated statements of earnings and an available-for-sale investment's unrealized loss is reclassified from AOCI to other expense (income), net in the consolidated statements of earnings. |
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 $78 million and $74 million at December 31, 2015 and 2014, respectively. |
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) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Finished goods $ $ Work-in-process Raw materials ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net as of December 31, 2015 included $356 million acquired through the acquisition of Pharmacyclics, Inc. (Pharmacyclics) on May 26, 2015. Refer to Note 5 for additional information. |
Property and Equipment | Property and Equipment as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Land $ $ Buildings Equipment Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, gross Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 was $417 million, $383 million, and $388 million in 2015, 2014, and 2013, 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 and Contingencies | Litigation and Contingencies Loss contingency provisions are recorded 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. 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 evaluated quarterly and adjusted if necessary 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 expense (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 test, 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 2015, the company concluded goodwill was not impaired. In 2015 and 2013, no intangible impairment charges were recorded. 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 the consolidated statements of earnings. |
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 in the consolidated statements of earnings 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 (OCI) in the consolidated statements of comprehensive 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 net foreign exchange loss in the consolidated statements of 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 consolidated 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 AOCI 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 AOCI 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 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) 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 this standard 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. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) modified retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU No. 2015-4, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date of ASU 2014-09 by one year for all entities. Accordingly, this standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. AbbVie is currently assessing the timing of its adoption and the impact of adopting this guidance on its consolidated financial statements and the implementation approach to be used. In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted on a retrospective basis. AbbVie elected to early adopt this new standard, effective in the three months ended June 30, 2015. As a result, AbbVie reclassified approximately $7 million and $27 million of net deferred financing costs as of December 31, 2014 that were previously classified as prepaid expenses and other current assets and other long-term assets, respectively, to long-term debt and lease obligations (current and non-current). Total debt issuance costs classified as a reduction of long-term debt and lease obligations (current and non-current) were $117 million as of December 31, 2015. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . This standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Entities are currently required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. This standard is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to measurement period adjustments that occur after the effective date of the guidance with earlier application permitted for financial statements that have not been issued. AbbVie elected to early adopt the standard, effective in the year ended December 31, 2015. The impact of this adoption was not material. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Entities are currently required to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. The amendments, which require non-current presentation only (by jurisdiction), are effective for financial statements issued for annual periods beginning after December 15, 2016 with earlier application permitted as of the beginning of an interim or annual reporting period. The guidance is to be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. AbbVie elected to early adopt this standard on a prospective basis, effective as of December 31, 2015 in order to simplify the presentation of deferred tax assets and liabilities. Prior periods were not retrospectively adjusted. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The standard requires several targeted changes including that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. The new guidance also changes certain disclosure requirements and other aspects of current US GAAP. Amendments are to be applied as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. This standard is effective for fiscal years starting after December 15, 2017, including interim periods within those fiscal years. The standard does not permit early adoption with the exception of certain targeted provisions. AbbVie is currently assessing the impact and timing of adopting this guidance on its consolidated financial statements. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of inventories, net | as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Finished goods $ $ Work-in-process Raw materials ​ ​ ​ ​ ​ ​ ​ ​ Inventories, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of property and equipment, net | as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Land $ $ Buildings Equipment Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, gross Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Supplemental Financial Inform28
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Financial Information | |
Schedule of interest expense, net | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense $ $ $ Interest income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of accounts payable and accrued liabilities | as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Sales rebates $ $ Accounts payable Dividends payable Salaries, wages and commissions Royalty and license arrangements Other ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of long-term liabilities | as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Pension and other post-employment benefits $ $ Liabilities for unrecognized tax benefits Other ​ ​ ​ ​ ​ ​ ​ ​ Other long-term liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Licensing, Acquisitions and o29
Licensing, Acquisitions and other Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Licensing, Acquisitions and Other Arrangements | |
Schedule of consideration paid | (in millions) ​ ​ ​ ​ ​ Fair value of AbbVie common stock issued to Pharmacyclics stockholders $ Cash consideration paid to Pharmacyclics stockholders Cash consideration paid to Pharmacyclics equity award holders ​ ​ ​ ​ ​ Total consideration $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of fair value of the assets acquired and liabilities assumed | The following table summarizes preliminary fair values of assets acquired and liabilities assumed as of the May 26, 2015 acquisition date: (in millions) ​ ​ ​ ​ ​ Assets acquired and liabilities assumed Cash and equivalents $ Short-term investments Accounts and other receivables Inventories Other assets Intangible assets Definite-lived developed product rights Definite-lived license agreements Indefinite-lived research and development Accounts payable and accrued liabilities ) Deferred income taxes ) Other long-term liabilities ) ​ ​ ​ ​ ​ Total identifiable net assets Goodwill ​ ​ ​ ​ ​ Total assets acquired and liabilities assumed $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of pro forma combined results of operations | years ended December 31 (in millions, except per share data) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Net revenues $ $ Net earnings $ $ Basic earnings per share $ $ Diluted earnings per share $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Summary of changes in the carrying amount of the entity's goodwill | (in millions) ​ ​ ​ ​ ​ Balance as of December 31, 2013 $ Additions — Foreign currency translation and other adjustments ) ​ ​ ​ ​ ​ Balance as of December 31, 2014 Additions Foreign currency translation and other adjustments ) ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of intangible assets | 2015 2014 as of December 31 (in millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Definite-lived intangible assets Developed product rights $ $ ) $ $ $ ) $ License agreements ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total definite-lived intangible assets ) ) Indefinite-lived research and development — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets, net $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring Plans | |
Summary of the cash activity in the restructuring reserve | (in millions) ​ ​ ​ ​ ​ Accrued balance at December 31, 2012 $ 2013 restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2013 2014 restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 2015 restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Debt, Credit Facilities, and 32
Debt, Credit Facilities, and Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt, Credit Facilities, and Commitments and Contingencies | |
Summary of long term debt | as of December 31 (in millions) Effective interest rate in 2015 (a) 2015 Effective interest rate in 2014 (a) 2014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior notes issued in 2012: Floating rate notes due 2015 % $ — % $ 1.2% notes due 2015 % — % 1.75% notes due 2017 % % 2.0% notes due 2018 % % 2.9% notes due 2022 % % 4.4% notes due 2042 % % Senior notes issued in 2015: 1.8% notes due 2018 % — — 2.5% notes due 2020 % — — 3.2% notes due 2022 % — — 3.6% notes due 2025 % — — 4.5% notes due 2035 % — — 4.7% notes due 2045 % — — Term loan facilities: Floating rate notes due 2016 % — — Floating rate notes due 2018 % — — Other — — Fair value hedges — ) — ) Unamortized bond discounts — ) — ) Unamortized deferred financing costs — ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total long-term debt and lease obligations Current portion ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent portion $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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 leases Debt maturities and capital leases ​ ​ ​ ​ ​ ​ ​ ​ 2016 $ $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ ​ ​ ​ Total obligations and commitments Fair value hedges and unamortized bond discounts and deferred financing costs — ) ​ ​ ​ ​ ​ ​ ​ ​ Total debt and lease obligations $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Financial Instruments and Fai33
Financial Instruments and Fair Value Measures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 as of December 31 (in millions) 2015 2014 Balance sheet caption 2015 2014 Balance sheet caption ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency forward exchange contracts— Hedging instruments $ $ Prepaid expenses and other $ — $ — Accounts payable and accrued liabilities Others not designated as hedges Prepaid expenses and other Accounts payable and accrued liabilities Interest rate swaps designated as fair value hedges — Prepaid expenses and other Other long-term liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of derivative activity and amounts and location of income (expense) and gain (loss) reclassified into net earnings | years ended December 31 (in millions) 2015 2014 2013 Statement of earnings caption ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency forward exchange contracts— Designated as cash flow hedges $ $ ) $ — Cost of products sold Not designated as hedges ) ) Net foreign exchange loss Interest rate swaps designated as fair value hedges ) Interest expense, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
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) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Cash and equivalents $ $ $ $ — Time deposits — — Equity securities — — Interest rate hedges — — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Interest rate hedges $ $ — $ $ — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Cash and equivalents $ $ $ $ — Time deposits — — Equity securities — — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Interest rate hedges $ $ — $ $ — Foreign currency contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the carrying values and fair values of certain financial instruments | Book values Approximate fair values as of December 31 (in millions) 2015 2014 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Investments $ $ $ $ Liabilities Short-term borrowings $ $ $ $ Current portion of long-term debt and lease obligations $ $ $ $ Long-term debt and lease obligations, excluding fair value hedges $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of fair value of financial instruments by fair value basis | Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Investments $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Short-term borrowings $ $ — $ $ — Current portion of long-term debt and lease obligations — — Long-term debt and lease obligations, excluding fair value hedges — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable Inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Investments $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Short-term borrowings $ $ — $ $ — Current portion of long-term debt and lease obligations — Long-term debt and lease obligations, excluding fair value hedges — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Post-Employment Benefits (Table
Post-Employment Benefits (Tables) - AbbVie sponsored plans | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefit Plans | |
Schedule of benefit plan information | Defined benefit plans Other post-employment plans as of and for the years ended December 31 (in millions) 2015 2014 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations Beginning of period $ $ $ $ Service cost Interest cost Employee contributions — — Plan amendments — — ) Actuarial (gain) loss ) ) Benefits paid ) ) ) ) Other, primarily foreign currency translation adjustments ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ End of period ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets Beginning of period — — Actual (loss) return on plan assets ) — — Company contributions Employee contributions — — Benefits paid ) ) ) ) Other, primarily foreign currency translation adjustments ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ End of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status end of period $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized in the consolidated balance sheets Other non-current assets $ $ $ — $ — Accounts payable and accrued liabilities ) ) ) ) Other long-term liabilities ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net obligation $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actuarial losses, net $ $ $ $ Prior service cost ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated other comprehensive loss at December 31 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of pretax gains and losses included in OCI | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Actuarial (gain) loss $ ) $ $ ) Prior service cost — Amortization of actuarial losses and prior service costs ) ) ) Foreign exchange (gain) loss ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total pre-tax (gain) loss recognized in other comprehensive (income) loss $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other post-employment plans Actuarial (gain) loss $ ) $ $ ) Prior service cost — ) ) Amortization of actuarial losses and prior service costs ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total pre-tax (gain) loss recognized in other comprehensive (income) loss $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of net periodic benefit cost relating to the company's defined benefit and other post-employment plans | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Service cost $ $ $ Interest cost Expected return on plan assets ) ) ) Amortization of actuarial losses and prior service costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other post-employment plans Service cost $ $ $ Interest cost Amortization of actuarial (gain) loss and prior service costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted-average assumptions used in determining benefit obligations at the measurement date | as of December 31 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Discount rate % % Rate of compensation increases % % Other post-employment plans Discount rate % % ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted-average assumptions used in determining net periodic benefit cost | years ended December 31 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit plans Discount rate % % % Expected long-term rate of return on plan assets % % % Expected rate of change in compensation % % % Other post-employment plans Discount rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of effects of 1% change in assumed health care cost trend rates | One percentage point year ended December 31, 2015 (in millions) (brackets denote a reduction) Increase Decrease ​ ​ ​ ​ ​ ​ ​ ​ Service cost and interest cost $ $ ) Projected benefit obligation $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of defined benefit pension plan assets | Basis of fair value measurement as of December 31 (in millions) 2015 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities U.S. government securities (d) — Corporate debt instruments (d) Non-U.S. government securities (d) — Other (d) — Absolute return funds (e) Real assets Other (f) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basis of fair value measurement as of December 31 (in millions) 2014 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities U.S. government securities (d) — — Corporate debt instruments (d) — Non-U.S. government securities (d) — Other (d) — Absolute return funds (e) Real assets — Other (f) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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) 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. (f) Investments in cash and cash equivalents. |
Summary of change in the value of plan assets that are measured using significant unobservable inputs (Level 3) | as of and for the years ended December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Beginning of period $ $ Actual return on plan assets on hand at end of period Purchases, sales and settlements, net ​ ​ ​ ​ ​ ​ ​ ​ End of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of expected pension and other post-employment payments | years ended December 31 (in millions) Defined benefit plans Other post-employment plans ​ ​ ​ ​ ​ ​ ​ ​ 2016 $ $ 2017 $ $ 2018 $ $ 2019 $ $ 2020 $ $ 2021 to 2025 $ $ ​ ​ ​ ​ ​ ​ ​ ​ |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity | |
Summary of AbbVie stock option activity for both AbbVie and Abbott employees | year ended December 31 (options in thousands, aggregate intrinsic value in millions) Options Weighted- average exercise price Weighted- average remaining life (in years) Aggregate intrinsic value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at beginning of period $ $ Granted Exercised ) Lapsed ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at end of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of AbbVie RSA and RSU activity (including performance-based awards) for both AbbVie and Abbott employees | year ended December 31 (share units in thousands) Share units Weighted-average grant date fair value ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at beginning of period $ Granted Vested ) Lapsed ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of period $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in balances of each component of accumulated other comprehensive loss | (in millions) (brackets denote losses) Foreign currency translation adjustments Pension and post- employment benefits Unrealized gains (losses) on marketable equity securities Hedging activities Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2012 $ $ ) $ $ ) $ ) Other comprehensive income (loss) before reclassifications ) Net losses reclassified from accumulated other comprehensive loss — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive income (loss) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Separation-related adjustments ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2013 ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income before reclassifications ) ) ) Net losses reclassified from accumulated other comprehensive loss — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2014 ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income before reclassifications ) ) Net losses (gains) reclassified from accumulated other comprehensive loss — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current-period other comprehensive (loss) income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ) $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive loss | years ended December 31 (in millions) (brackets denote gains) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension and post-employment benefits Amortization of actuarial losses and other (a) $ $ $ Less tax benefit ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications, net of tax $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hedging activities (Gains) losses on designated cash flow hedges (b) $ ) $ $ — Less tax expense (benefit) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassifications, net of tax $ ) $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Amounts are included in the computation of net periodic benefit cost (see Note 11). (b) Amounts are included in cost of products sold (see Note 10). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of earnings before income taxes | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic $ ) $ ) $ ) Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total earnings before income tax expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of income taxes | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Domestic $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred Domestic $ $ ) $ Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred taxes $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of effective tax rate reconciliation | years ended December 31 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Statutory tax rate % % % State taxes, net of federal benefit — Effect of foreign operations ) ) ) U.S. tax credits ) ) ) Branded prescription drug fee Valuation allowances ) All other, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of deferred tax assets and liabilities | as of December 31 (in millions) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets Compensation and employee benefits $ $ Accruals and reserves Chargebacks and rebates Deferred revenue Depreciation Net operating losses and other credit carryforwards Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowances ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities Excess of book basis over tax basis of intangible assets ) ) Excess of book basis over tax basis in investments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax (liabilities) assets $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of unrecognized tax benefits | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1 $ $ $ Increase due to current year tax positions Increase due to prior year tax positions — Decrease due to prior year tax positions ) ) — Lapse of statutes of limitations ) ) — Separation-related adjustments — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment and Geographic Area I37
Segment and Geographic Area Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment and Geographic Area Information | |
Schedule of consolidated financial information by segment | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HUMIRA $ $ $ IMBRUVICA — — VIEKIRA — Creon Synagis Lupron Synthroid Kaletra AndroGel Sevoflurane Duodopa Dyslipidemia products All other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net revenues $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of net sales to external customers, based on the country that sold the product | years ended December 31 (in millions) 2015 2014 2013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States $ $ $ Germany United Kingdom Spain Japan France Canada Italy Brazil The Netherlands All other countries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net revenues $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Data (una38
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data (unaudited) | |
Schedule of quarterly financial data (unaudited) | (in millions except per share data) 2015 2014 ​ ​ ​ ​ ​ ​ ​ ​ First Quarter Net revenues $ $ Gross margin $ $ Net earnings (a) $ $ Basic earnings per share $ $ Diluted earnings per share $ $ Cash dividends declared per common share $ $ Second Quarter Net revenues $ $ Gross margin $ $ Net earnings (b) $ $ Basic earnings per share $ $ Diluted earnings per share $ $ Cash dividends declared per common share $ $ Third Quarter Net revenues $ $ Gross margin $ $ Net earnings (c) $ $ Basic earnings per share $ $ Diluted earnings per share $ $ Cash dividends declared per common share $ $ Fourth Quarter Net revenues (d) $ $ Gross margin (d) $ $ Net earnings (loss) (e) $ $ ) Basic earnings (loss) per share $ $ ) (f) Diluted earnings (loss) per share $ $ ) (f) Cash dividends declared per common share $ $ ​ ​ ​ ​ ​ ​ ​ ​ (a) Results for the first quarter of 2015 included after-tax foreign exchange losses of $170 million related to the liquidation in 2015 of remaining foreign currency positions related to the terminated proposed combination with Shire in 2014, a $100 million after-tax charge as a result of entering into an exclusive worldwide license agreement with C 2 N and after-tax costs of $41 million incurred in connection with the with the acquisition of Pharmacyclics. (b) Second quarter results for 2015 included after-tax costs totaling $215 million incurred in connection with the acquisition and integration of Pharmacyclics. In 2014, second quarter results included an after-tax charge of $40 million related to a regulatory milestone made to a collaboration partner for regulatory milestones related to the company's HCV program. (c) Results for the third quarter of 2015 included a $350 million after-tax charge related to the purchase of a rare pediatric disease PRV from United Therapeutics Corporation, after after-tax costs totaling $85 million incurred in connection with the acquisition and integration of Pharmacyclics, and an $83 million after-tax charge due to the achievement of a development milestone under the global collaboration with Infinity. In 2014, third quarter results included a $173 million after-tax charge as a result of entering into a global collaboration with Infinity, a $250 million after-tax charge related to a research and development collaboration agreement with Calico, and transaction and financing-related and other costs aggregating $172 million after-tax that were incurred in connection with the terminated proposed combination with Shire. Refer to Note 5 for further information relating to the termination of the proposed combination with Shire and the collaborations with Calico and Infinity. (d) Net revenues and gross margin in 2015 included milestone revenue of $40 million from a collaboration partner related the company's oncology program. Net revenues and gross margin in 2014 include royalty income of $81 million relating to prior periods as a result of the settlement of a licensing arrangement. (e) Fourth quarter results for 2015 included after-tax costs totaling $68 million incurred in connection with the acquisition and integration of Pharmacyclics and after-tax charges of $101 million to increase the company's litigation reserves. For 2014, results for the fourth quarter included after-tax transaction and financing-related and other costs incurred in connection with the terminated proposed combination with Shire aggregating $1.6 billion and a $500 million after-tax charge related to the research and development collaboration agreement with Calico. (f) 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 Prese39
Background and Basis of Presentation (Details) $ in Millions | Jan. 02, 2013 | Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Background and Basis of Presentation | ||||
Number of wholesalers | customer | 3 | |||
Separation-related adjustments recorded in stockholders' equity | $ 1,271 | |||
Separation-related expenses | $ 270 | $ 445 | 254 | |
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | ||||
Accounts receivable | 4,730 | 3,735 | ||
Accounts payable and accrued liabilities | $ 8,463 | 6,954 | ||
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 Laboratories | Transition Services Agreement | Maximum | ||||
Background and Basis of Presentation | ||||
Term for which transition services may be provided | 24 months | |||
Abbott Laboratories | Separation Agreement | ||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | ||||
Net revenues | $ 213 | $ 282 | $ 738 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Advertising | |||
Advertising expenses | $ 704 | $ 665 | $ 626 |
Pension and Post-Employment Benefits | |||
Amortization period of differences between the expected long-term return on plan assets and the actual return | 5 years |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Millions | Dec. 31, 2015 | May. 26, 2015 | Dec. 31, 2014 |
Inventories, Net | |||
Finished goods | $ 469 | $ 341 | |
Work-in-process | 1,081 | 629 | |
Raw materials | 169 | 154 | |
Inventories, net | 1,719 | 1,124 | |
Inventories acquired | $ 492 | ||
Accounts Receivable | |||
Allowance for accounts receivable | 78 | $ 74 | |
Pharmacyclics Inc | |||
Inventories, Net | |||
Inventories acquired | $ 356 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment | ||||
Property and equipment, gross | $ 7,334 | $ 7,105 | ||
Less accumulated depreciation | (4,769) | (4,620) | ||
Property and equipment, net | 2,565 | 2,485 | ||
Depreciation expense | 417 | 383 | $ 388 | |
Goodwill and Intangible Assets | ||||
Impairment charges | $ 37 | 0 | 37 | $ 0 |
Land | ||||
Property and Equipment | ||||
Property and equipment, gross | 46 | 48 | ||
Building | ||||
Property and Equipment | ||||
Property and equipment, gross | $ 1,284 | 1,228 | ||
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 | $ 5,656 | 5,324 | ||
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 | $ 348 | 505 | ||
Recent Accounting Pronouncements | ||||
Recent Accounting Pronouncements | ||||
Debt issuance costs classified as a reduction to long-term debt and lease obligations (current and non-current) | $ 117 | |||
Prepaid expenses and other current assets | Recent Accounting Pronouncements | ||||
Recent Accounting Pronouncements | ||||
Net deferred financing costs reclassified to a reduction in the carrying amount of its long-term debt | 7 | |||
Other assets | Recent Accounting Pronouncements | ||||
Recent Accounting Pronouncements | ||||
Net deferred financing costs reclassified to a reduction in the carrying amount of its long-term debt | $ 27 |
Supplemental Financial Inform43
Supplemental Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest Expense, net | |||
Interest expense | $ 719 | $ 429 | $ 299 |
Interest and dividend income | (33) | (38) | (21) |
Interest expense, net | 686 | 391 | $ 278 |
Prepaid Expenses and Other | |||
Prepaid Expense and Other Assets, Total | 1,458 | 1,952 | |
Accounts Payable and Accrued Liabilities | |||
Sales rebates | 2,355 | 1,384 | |
Accounts payable | 1,597 | 1,401 | |
Dividends payable | 924 | 791 | |
Salaries, wages and commissions | 632 | 623 | |
Royalty and license arrangements | 411 | 821 | |
Other | 2,544 | 1,934 | |
Accounts payable and accrued liabilities | 8,463 | 6,954 | |
Long-Term Liabilities | |||
Pension and other post-employment benefits | 1,949 | 2,220 | |
Liabilities for unrecognized tax benefits | 902 | 471 | |
Other | 844 | 990 | |
Long-term liabilities | 3,695 | 3,681 | |
Other Income Expense | |||
Other (Income) Expense | |||
Income from resolution of contractual agreement | 34 | ||
Shire plc | |||
Interest Expense, net | |||
Interest expense, net | $ 141 | ||
Pharmacyclics Inc | |||
Interest Expense, net | |||
Interest expense, net | $ 86 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | May. 27, 2015 | May. 26, 2015 | Jan. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | Oct. 20, 2014 | Feb. 15, 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 | |||||||||
Amount authorized under stock repurchase program | $ 5,000 | $ 5,000 | $ 1,500 | |||||||
Payment for shares repurchased on the open market | $ 300 | $ 2,800 | $ 550 | $ 223 | ||||||
Shares repurchased | 46 | 9 | 4 | |||||||
Earnings allocable to participating securities - Basic (in dollars) | $ 26 | $ 9 | $ 26 | |||||||
Earnings allocable to participating securities - Diluted (in dollars) | $ 26 | $ 9 | $ 26 | |||||||
Morgan Stanley & Co. LLC | ||||||||||
Anti-dilutive securities excluded from the computation of earnings per common share | ||||||||||
Amount authorized under stock repurchase program | $ 5,000 | |||||||||
Payment for shares repurchased on the open market | $ 5,000 | |||||||||
Shares repurchased | 68 | 5 | ||||||||
Percentage of initial delivery of shares | 90.00% | |||||||||
Restricted Stock And Restricted Stock Units | ||||||||||
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 | 4 | 5 |
Licensing, Acquisitions and O45
Licensing, Acquisitions and Other Arrangements (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | May. 26, 2015 | Sep. 30, 2013 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Collaborations and Other Arrangements | ||||||||||
Acquired in-process research and development | $ 150 | $ 352 | $ 338 | |||||||
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 | |||||||||
Other arrangements | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Acquired in-process research and development | 50 | 77 | $ 48 | |||||||
Calico Life Sciences LLC | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Payments to collaborators for joint development and commercialization of specified products | $ 250 | |||||||||
Initial upfront payment | 500 | $ 250 | ||||||||
Research and development expense | $ 500 | |||||||||
C2N Diagnostics | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Initial upfront payment | $ 100 | |||||||||
Infinity Pharmaceuticals Inc | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Payments to collaborators for joint development and commercialization of specified products | $ 83 | $ 173 | ||||||||
Maximum | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Payments for achievement of certain milestones under an agreement | 1,200 | |||||||||
Maximum | Ablynx NV | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Payments for achievement of certain milestones under an agreement | 665 | |||||||||
Maximum | Galapagos NV | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Payments for achievement of certain milestones under an agreement | $ 360 | |||||||||
Research And Development Expense | Alvine Pharmaceuticals, Inc. | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Initial upfront payment | $ 70 | |||||||||
Pharmacyclics Inc | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Percentage of cash consideration | 58.00% | |||||||||
Percentage of share consideration | 42.00% | |||||||||
Shares issued as consideration | 128 | |||||||||
Cash consideration paid | $ 12,400 | |||||||||
Fair value of AbbVie common stock issued to Pharmacyclics stockholders | 8,405 | |||||||||
Cash consideration paid to Pharmacyclics stockholders | 11,749 | |||||||||
Cash consideration paid to Pharmacyclics equity award holders | 616 | |||||||||
Total consideration | $ 20,770 | |||||||||
Maximum period of valuation | 1 year | |||||||||
Pharmacyclics Inc | Scenario One | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Purchase price payment partly in cash (in dollars per share) | $ 152.25 | |||||||||
Purchase price payment partly in fair market value of shares of acquirer's common stock (in dollars per share) | 109 | |||||||||
Pharmacyclics Inc | Scenario Two | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Purchase price payment fully in cash (in dollars per share) | 261.25 | |||||||||
Pharmacyclics Inc | Scenario Three | ||||||||||
Collaborations and Other Arrangements | ||||||||||
Purchase price payment fully in fair market value of shares of acquirer's common stock (in dollars per share) | $ 261.25 |
Licensing, Acquisitions and O46
Licensing, Acquisitions and Other Arrangements (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 26, 2015 | |
Assets acquired and liabilities assumed | ||||||||||||
Cash and equivalents | $ 877 | |||||||||||
Short-term investments | 11 | |||||||||||
Accounts and other receivables | 106 | |||||||||||
Inventories | 492 | |||||||||||
Other assets | 212 | |||||||||||
Accounts payable and accrued liabilities | (381) | |||||||||||
Deferred income taxes | (6,453) | |||||||||||
Other long-term liabilities | (254) | |||||||||||
Total identifiable net assets | 13,160 | |||||||||||
Goodwill | $ 13,168 | $ 5,862 | $ 13,168 | $ 5,862 | $ 6,277 | 7,610 | ||||||
Total assets acquired and liabilities assumed | 20,770 | |||||||||||
Fair market value step-up adjustment to inventories | 445 | 445 | ||||||||||
Net Revenues | 6,400 | $ 5,944 | $ 5,475 | $ 5,040 | $ 5,452 | $ 5,019 | $ 4,926 | $ 4,563 | 22,859 | 19,960 | 18,790 | |
Operating earnings (loss) | 7,537 | $ 3,411 | $ 5,664 | |||||||||
IPR&D | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Intangible assets | 7,180 | |||||||||||
Developed Technology Rights | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Intangible assets | 4,590 | |||||||||||
Licensing Agreements | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 6,780 | |||||||||||
Pharmacyclics Inc | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Inventories | $ 356 | $ 356 | ||||||||||
Amortized period of inventory | 18 months | |||||||||||
Finite intangible assets weighted-average estimated useful life | 12 years | |||||||||||
Net Revenues | $ 774 | |||||||||||
Operating earnings (loss) | (519) | |||||||||||
Acquisition-related compensation expense | 346 | |||||||||||
Acquisition-related inventory step up and amortization of intangible assets | 261 | |||||||||||
Acquisition-related transaction and integration costs | 100 | |||||||||||
Pharmacyclics Inc | Selling General And Administrative Expenses | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Acquisition-related costs | 294 | |||||||||||
Pharmacyclics Inc | Research And Development Expense | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Acquisition-related costs | 152 | |||||||||||
Pharmacyclics Inc | Cost Of Sales | ||||||||||||
Assets acquired and liabilities assumed | ||||||||||||
Acquisition-related costs | $ 261 |
Licensing, Acquisitions and O47
Licensing, Acquisitions and Other Arrangements (Details 3) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Acquisitions | ||||||||||
Cash outflows related to other acquisitions and investments | $ 964 | $ 622 | $ 405 | |||||||
Cash outflows related to acquisitions and investments | 11,488 | |||||||||
Acquired in-process research and development | 150 | 352 | 338 | |||||||
Pro forma combined results of operations | ||||||||||
Net revenues | 23,215 | 20,690 | ||||||||
Net earnings | $ 5,345 | $ 812 | ||||||||
Basic earnings per share | $ 3.18 | $ 0.47 | ||||||||
Diluted earnings per share | $ 3.16 | $ 0.47 | ||||||||
C2N Diagnostics | ||||||||||
Acquisitions | ||||||||||
Initial upfront payment | $ 100 | |||||||||
Additional payment | $ 685 | $ 685 | ||||||||
Calico Life Sciences LLC | ||||||||||
Acquisitions | ||||||||||
Initial upfront payment | $ 500 | $ 250 | ||||||||
Research and development expense | $ 500 | |||||||||
Research and early development term | 5 years | |||||||||
Advance collaboration projects term | 10 years | |||||||||
Rare Pediatric Disease Priority Review Voucher From United Therapeutics Corporation | ||||||||||
Acquisitions | ||||||||||
Research and development expense | $ 350 | |||||||||
Research And Development Expense | Alvine Pharmaceuticals, Inc. | ||||||||||
Acquisitions | ||||||||||
Initial upfront payment | $ 70 | |||||||||
Research And Development Expense | Infinity Pharmaceuticals, Inc. | ||||||||||
Acquisitions | ||||||||||
Additional payment | 400 | $ 400 | ||||||||
Research and development expense | 130 | |||||||||
Research And Development Expense | Rare Pediatric Disease Priority Review Voucher From United Therapeutics Corporation | ||||||||||
Acquisitions | ||||||||||
Research and development expense | 350 | |||||||||
IPR&D | ||||||||||
Acquisitions | ||||||||||
Research and development expense | 150 | 352 | $ 338 | |||||||
IPR&D | C2N Diagnostics | ||||||||||
Acquisitions | ||||||||||
Initial upfront payment | $ 100 | |||||||||
IPR&D | Infinity Pharmaceuticals, Inc. | ||||||||||
Acquisitions | ||||||||||
Initial upfront payment | 275 | |||||||||
Other Expense | Calico Life Sciences LLC | ||||||||||
Acquisitions | ||||||||||
Payments relating to collaboration | 750 | |||||||||
Pharmacyclics Inc | ||||||||||
Termination of Combination with Shire | ||||||||||
Acquisition-related and financing-related costs | $ 68 | $ 85 | $ 215 | 41 | ||||||
Shire plc | ||||||||||
Termination of Combination with Shire | ||||||||||
Acquisition-related and financing-related costs | 1,800 | |||||||||
Break fee | $ 1,600 | $ 1,600 | ||||||||
Foreign exchange loss associated with forward contracts | 170 | 490 | ||||||||
Shire plc | Selling General And Administrative Expenses | ||||||||||
Termination of Combination with Shire | ||||||||||
Acquisition-related and financing-related costs | 1,700 | |||||||||
Shire plc | Interest Expense | ||||||||||
Termination of Combination with Shire | ||||||||||
Acquisition-related and financing-related costs | 141 | |||||||||
Foreign currency forward exchange contracts | Shire plc | ||||||||||
Termination of Combination with Shire | ||||||||||
Foreign exchange loss associated with forward contracts | $ 170 | $ 666 |
Collaboration with Janssen Bi48
Collaboration with Janssen Biotech, Inc. (Details) - Collaborative arrangement - USD ($) $ in Millions | May. 26, 2015 | Dec. 31, 2015 | Dec. 31, 2015 |
Collaborative and license agreements | |||
Share of collaboration development costs responsible by the entity (as a percent) | 40.00% | ||
Outside of United States | |||
Collaborative and license agreements | |||
Share of pretax profits under collaboration | $ 95 | ||
Cost sharing expenses under collaboration | 159 | ||
Janssen Biotech, Inc | |||
Collaborative and license agreements | |||
Share of collaboration development costs responsible by Janssen (as a percent) | 60.00% | ||
Janssen Biotech, Inc | United States | |||
Collaborative and license agreements | |||
Expense recorded for profit sharing before taxes to other party | $ 306 | ||
Janssen Biotech, Inc | Accounts and other receivables, net | |||
Collaborative and license agreements | |||
Amounts receivable | 45 | 45 | |
Janssen Biotech, Inc | Accounts payable and accrued liabilities | |||
Collaborative and license agreements | |||
Amounts payable | $ 134 | $ 134 | |
Pharmacyclics Inc | Janssen Biotech, Inc | |||
Collaborative and license agreements | |||
Milestone payments | $ 200 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets | ||||
Accumulated goodwill impairment losses | $ 0 | |||
Definite-lived intangible assets | ||||
Gross carrying amount | 17,103 | $ 5,643 | ||
Accumulated amortization | (4,967) | (4,575) | ||
Net carrying amount | 12,136 | 1,068 | ||
Indefinite-lived research and development | 7,573 | 445 | ||
Net carrying amount - Indefinite-lived research and development | 7,573 | 445 | ||
Total intangible assets gross carrying amount | 24,676 | 6,088 | ||
Accumulated amortization - Total intangible assets | (4,967) | (4,575) | ||
Total intangible assets, net | 19,709 | 1,513 | ||
Amortization of intangible assets | 419 | 403 | $ 509 | |
Anticipated annual amortization expense | ||||
2,016 | 655 | |||
2,017 | 740 | |||
2,018 | 894 | |||
2,019 | 1,000 | |||
2,020 | 1,100 | |||
Impairment charges | $ 37 | $ 0 | 37 | $ 0 |
Weighted Average | ||||
Definite-lived intangible assets | ||||
Amortization period | 10 years | |||
Developed Technology Rights | ||||
Definite-lived intangible assets | ||||
Gross carrying amount | $ 9,103 | 4,546 | ||
Accumulated amortization | (3,944) | (3,706) | ||
Net carrying amount | $ 5,159 | 840 | ||
Developed Technology Rights | Minimum | ||||
Definite-lived intangible assets | ||||
Amortization period | 3 years | |||
Developed Technology Rights | Maximum | ||||
Definite-lived intangible assets | ||||
Amortization period | 16 years | |||
Developed Technology Rights | Weighted Average | ||||
Definite-lived intangible assets | ||||
Amortization period | 12 years | |||
Licensing Agreements | ||||
Definite-lived intangible assets | ||||
Acquisition of amortizable intangible assets | 80 | |||
Gross carrying amount | $ 8,000 | 1,097 | ||
Accumulated amortization | (1,023) | (869) | ||
Net carrying amount | $ 6,977 | $ 228 | ||
Licensing Agreements | Minimum | ||||
Definite-lived intangible assets | ||||
Amortization period | 3 years | |||
Licensing Agreements | Maximum | ||||
Definite-lived intangible assets | ||||
Amortization period | 16 years | |||
Licensing Agreements | Weighted Average | ||||
Definite-lived intangible assets | ||||
Amortization period | 11 years |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill | ||
Balance at the beginning of the period | $ 5,862 | $ 6,277 |
Additions | 7,610 | |
Foreign currency translation and other adjustments | (304) | (415) |
Balance at the end pf the period | $ 13,168 | $ 5,862 |
Restructuring Plans (Details)
Restructuring Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring Plans | |||
Restructuring charges | $ 138 | $ 23 | $ 83 |
Restructuring Plans (Details 2)
Restructuring Plans (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring reserve activity | |||
Restructuring charges | $ 138 | $ 23 | $ 83 |
Restructuring Plan 2015 and Prior Years | |||
Restructuring reserve activity | |||
Accrued balance beginning of the period | 122 | 191 | 233 |
Restructuring charges | 126 | 16 | 76 |
Payments and other adjustments | (100) | (85) | (118) |
Accrued balance end of the period | $ 148 | $ 122 | 191 |
Reversal of a previously recorded restructuring reserve due to the company's revaluation of a decision to exit a manufacturing facility | $ 23 |
Debt, Credit Facilities, and 53
Debt, Credit Facilities, and Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 25, 2015 | Nov. 30, 2015 | May. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2014 |
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Fair value hedges | $ (72) | $ (180) | |||||
Unamortized bond discounts | (85) | (49) | |||||
Unamortized deferred financing costs | (117) | (34) | |||||
Total long-term debt and lease obligations | 31,265 | 14,552 | |||||
Current portion | 2,025 | 4,014 | |||||
Noncurrent portion | 29,240 | 10,538 | |||||
Debt issuance costs | $ 93 | ||||||
Notes issued | $ 16,700 | ||||||
Revolving Credit Facility | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Debt term | 5 years | ||||||
Borrowing capacity | $ 3,000 | ||||||
Credit agreement outstanding | 0 | 0 | |||||
Revolving Credit Facility Replaced | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Borrowing capacity | $ 2,000 | ||||||
Long Term Notes Issued In 2012 | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 10,700 | ||||||
Long Term Variable Rate Notes Due In2015 | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 500 | ||||||
Weighted-average effective interest rate (as a percent) | 1.13% | 1.09% | |||||
Repayment | $ 4,000 | ||||||
Long Term Notes Due In2015 At1.2 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 3,500 | ||||||
Interest rate percentage | 1.20% | ||||||
Weighted-average effective interest rate (as a percent) | 1.29% | 1.31% | |||||
Long Term Notes Due In2017 At1.75 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 4,000 | $ 4,000 | |||||
Interest rate percentage | 1.75% | ||||||
Weighted-average effective interest rate (as a percent) | 1.86% | 1.86% | |||||
Long Term Notes Due In2018 At2.0 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 1,000 | $ 1,000 | |||||
Interest rate percentage | 2.00% | ||||||
Weighted-average effective interest rate (as a percent) | 2.15% | 2.15% | |||||
Long Term Notes Due In2022 At2.9 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 3,100 | $ 3,100 | |||||
Interest rate percentage | 2.90% | ||||||
Weighted-average effective interest rate (as a percent) | 2.97% | 2.97% | |||||
Long Term Notes Due In2042 At4.4 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 2,600 | $ 2,600 | |||||
Interest rate percentage | 4.40% | ||||||
Weighted-average effective interest rate (as a percent) | 4.46% | 4.46% | |||||
Unsecured Senior Notes Due In 2018 At1.8 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 3,000 | ||||||
Interest rate percentage | 1.80% | ||||||
Weighted-average effective interest rate (as a percent) | 1.92% | ||||||
Unsecured Senior Notes Due In 2020 At 2.5 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 3,750 | ||||||
Interest rate percentage | 2.50% | ||||||
Weighted-average effective interest rate (as a percent) | 2.65% | ||||||
Unsecured Senior Notes Due In 2022 At 3.2 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 1,000 | ||||||
Interest rate percentage | 3.20% | ||||||
Weighted-average effective interest rate (as a percent) | 3.28% | ||||||
Unsecured Senior Notes Due In 2025 At 3.6 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 3,750 | ||||||
Interest rate percentage | 3.60% | ||||||
Weighted-average effective interest rate (as a percent) | 3.66% | ||||||
Unsecured Senior Notes Due In 2035 At 4.5 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 2,500 | ||||||
Interest rate percentage | 4.50% | ||||||
Weighted-average effective interest rate (as a percent) | 4.58% | ||||||
Unsecured Senior Notes Due In 2045 At 4.7 Percent | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 2,700 | ||||||
Interest rate percentage | 4.70% | ||||||
Weighted-average effective interest rate (as a percent) | 4.73% | ||||||
Long Term Variable Rate Notes Due In 2016 | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | 2,000 | $ 2,000 | |||||
Weighted-average effective interest rate (as a percent) | 1.23% | ||||||
Debt term | 364 days | ||||||
Long Term Variable Rate Notes Due In 2018 | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 2,000 | $ 2,000 | |||||
Weighted-average effective interest rate (as a percent) | 1.38% | ||||||
Debt term | 3 years | ||||||
Other Long Term Debt | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Total long-term debt and lease obligations | $ 139 | $ 115 | |||||
Bridge Term Loan Agreement | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Debt issuance costs | $ 86 | ||||||
Debt term | 364 days | ||||||
Drawn amount | $ 0 | ||||||
Borrowing capacity | $ 18,000 | ||||||
Pharmacyclics Inc | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Proceeds from debt issued to pay acquisition | 11,500 | ||||||
Morgan Stanley & Co. LLC | |||||||
Debt, Credit Facilities, and Commitments and Contingencies | |||||||
Proceeds from debt issued to financing | $ 5,000 |
Debt, Credit Facilities, and 54
Debt, Credit Facilities, and Commitments and Contingencies (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Short-Term Borrowings | |||
Lease expense | $ 146 | $ 115 | $ 107 |
Short-Term Borrowings | |||
Short-term borrowings | 406 | 425 | |
Operating leases | |||
2,016 | 119 | ||
2,017 | 111 | ||
2,018 | 97 | ||
2,019 | 86 | ||
2,020 | 78 | ||
Thereafter | 519 | ||
Total obligations and commitments | 1,010 | ||
Debt maturities and capital leases | |||
2,016 | 2,025 | ||
2,017 | 4,024 | ||
2,018 | 6,025 | ||
2,019 | 18 | ||
2,020 | 3,760 | ||
Thereafter | 15,687 | ||
Total obligations and commitments | 31,539 | ||
Fair value hedges and unamortized bond discounts | (274) | ||
Total long-term debt and lease obligations | 31,265 | 14,552 | |
Commercial Paper | |||
Short-Term Borrowings | |||
Short-term borrowings | $ 400 | $ 416 | |
Weighted-average interest rate (as a percent) | 0.30% | 0.20% |
Financial Instruments and Fai55
Financial Instruments and Fair Value Measures (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Financial Instruments and Fair Value Measures | |||
Number of outstanding derivative instruments containing credit risk contingent features | item | 0 | ||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | $ 70 | $ 211 | |
Derivatives in liability position | 102 | 243 | |
Shire plc | |||
Derivative instruments, notional amount and fair value | |||
Foreign exchange loss associated with forward contracts | $ 170 | 490 | |
Foreign currency forward exchange contracts | Shire plc | |||
Derivative instruments, notional amount and fair value | |||
Foreign exchange loss associated with forward contracts | $ 170 | 666 | |
Designated As Hedging Instrument | Interest Rate Swap | Prepaid expenses and others | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | 9 | ||
Designated As Hedging Instrument | Interest Rate Swap | Other long-term liabilities | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in liability position | 81 | 180 | |
Designated As Hedging Instrument | Interest Rate Swap | Fair Value Hedging | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | 11,000 | 8,000 | |
Designated As Hedging Instrument | Foreign currency forward exchange contracts | Prepaid expenses and others | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | 33 | 141 | |
Designated As Hedging Instrument | Foreign currency forward exchange contracts | Cash Flow Hedging | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | $ 1,500 | 1,400 | |
Approximate length of time over which accumulated gains and losses will be recognized in Cost of products sold | 12 months | ||
Nondesignated | Foreign currency forward exchange contracts | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | $ 6,800 | 6,800 | |
Nondesignated | Foreign currency forward exchange contracts | Prepaid expenses and others | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in asset position | 28 | 70 | |
Nondesignated | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Derivatives in liability position | $ 21 | 63 | |
Nondesignated | Foreign currency forward exchange contracts | Cash Flow Hedging | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | $ 16,900 |
Financial Instruments and Fai56
Financial Instruments and Fair Value Measures (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain (loss) on derivatives | |||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | $ 218 | $ (350) | $ (270) |
Foreign currency forward exchange contracts | Nondesignated | Foreign Currency Gain Loss | |||
Gain (loss) on derivatives | |||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | (155) | (523) | 81 |
Foreign currency forward exchange contracts | Cash Flow Hedging | |||
Gain (loss) on derivatives | |||
Gains (losses) recognized in other comprehensive (loss) income | 122 | 193 | (77) |
Foreign currency forward exchange contracts | Cash Flow Hedging | Cost Of Sales | |||
Gain (loss) on derivatives | |||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | 265 | (79) | |
Interest Rate Swap | Fair Value Hedging | Interest Expense | |||
Gain (loss) on derivatives | |||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | $ 108 | $ 252 | $ (351) |
Financial Instruments and Fai57
Financial Instruments and Fair Value Measures (Details 3) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Time deposits | $ 37 | $ 145 |
Derivatives in asset position | 70 | 211 |
Total assets | 37 | 145 |
Liabilities | ||
Derivatives in liability position | 102 | 243 |
Total liabilities | 31,565 | 15,254 |
Cumulative net unrealized holding gains on available-for-sale equity securities | 47 | 3 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Time deposits | 68 | |
Total assets | 68 | |
Liabilities | ||
Total liabilities | 27,061 | 14,715 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Time deposits | 13 | |
Total assets | 13 | |
Liabilities | ||
Total liabilities | 4,504 | 539 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Time deposits | 37 | 64 |
Total assets | 37 | 64 |
Fair Value Measurements Recurring | ||
Assets | ||
Cash and equivalents | 8,399 | 8,348 |
Equity securities | 111 | 13 |
Interest rate hedges | 9 | |
Derivatives in asset position | 211 | |
Total assets | 8,588 | 8,581 |
Liabilities | ||
Interest rate hedges | 81 | 180 |
Derivatives in liability position | 21 | 63 |
Total liabilities | 102 | 243 |
Fair Value Measurements Recurring | Foreign Currency Contract | ||
Assets | ||
Derivatives in asset position | 61 | |
Fair Value Measurements Recurring | Bank Time Deposits | ||
Assets | ||
Time deposits | 8 | 9 |
Fair Value Measurements Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Cash and equivalents | 798 | 1,214 |
Equity securities | 111 | 13 |
Total assets | 909 | 1,227 |
Fair Value Measurements Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Cash and equivalents | 7,601 | 7,134 |
Interest rate hedges | 9 | |
Derivatives in asset position | 211 | |
Total assets | 7,679 | 7,354 |
Liabilities | ||
Interest rate hedges | 81 | 180 |
Derivatives in liability position | 21 | 63 |
Total liabilities | 102 | 243 |
Fair Value Measurements Recurring | Significant other observable inputs (Level 2) | Foreign Currency Contract | ||
Assets | ||
Derivatives in asset position | 61 | |
Fair Value Measurements Recurring | Significant other observable inputs (Level 2) | Bank Time Deposits | ||
Assets | ||
Time deposits | $ 8 | $ 9 |
Financial Instruments and Fai58
Financial Instruments and Fair Value Measures (Details 4) $ in Millions | Dec. 31, 2015USD ($) |
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 |
Financial Instruments and Fai59
Financial Instruments and Fair Value Measures (Details 5) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Investments | $ 37 | $ 145 |
Liabilities | ||
Short-term borrowings | 406 | 425 |
Current portion of long-term debt and lease obligations | 2,016 | 4,026 |
Long-term debt and lease obligations, excluding fair value hedges | 29,143 | 10,803 |
Carrying Reported Amount Fair Value Disclosure | ||
Assets | ||
Investments | 34 | 95 |
Liabilities | ||
Short-term borrowings | 406 | 425 |
Current portion of long-term debt and lease obligations | 2,025 | 4,014 |
Long-term debt and lease obligations, excluding fair value hedges | 29,312 | 10,718 |
Estimate Of Fair Value Fair Value Disclosure | ||
Assets | ||
Investments | 37 | 145 |
Liabilities | ||
Short-term borrowings | 406 | 425 |
Current portion of long-term debt and lease obligations | 2,016 | 4,026 |
Long-term debt and lease obligations, excluding fair value hedges | $ 29,143 | $ 10,803 |
Financial Instruments and Fai60
Financial Instruments and Fair Value Measures (Details 6) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Investments | $ 37 | $ 145 |
Total assets | 37 | 145 |
Liabilities | ||
Short-term borrowings | 406 | 425 |
Current portion of long-term debt and lease obligations | 2,016 | 4,026 |
Long-term debt and lease obligations, excluding fair value hedges | 29,143 | 10,803 |
Total liabilities | 31,565 | 15,254 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Investments | 68 | |
Total assets | 68 | |
Liabilities | ||
Current portion of long-term debt and lease obligations | 4,005 | |
Long-term debt and lease obligations, excluding fair value hedges | 27,061 | 10,710 |
Total liabilities | 27,061 | 14,715 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Investments | 13 | |
Total assets | 13 | |
Liabilities | ||
Short-term borrowings | 406 | 425 |
Current portion of long-term debt and lease obligations | 2,016 | 21 |
Long-term debt and lease obligations, excluding fair value hedges | 2,082 | 93 |
Total liabilities | 4,504 | 539 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Investments | 37 | 64 |
Total assets | $ 37 | $ 64 |
Financial Instruments and Fai61
Financial Instruments and Fair Value Measures (Details 7) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015USD ($)customeritemVEF / $ | Dec. 31, 2014USD ($) | Dec. 31, 2013 | Feb. 17, 2016 | |
Concentration of Risk | ||||
Exchange rate | VEF / $ | 6.3 | |||
Number of principal customers | customer | 3 | |||
Government Contracts Concentration Risk | ||||
Concentration of Risk | ||||
Net governmental receivables outstanding | $ 525 | $ 446 | ||
Venezuelan | ||||
Concentration of Risk | ||||
Number of exchange rate systems | item | 3 | |||
Official Rate | ||||
Concentration of Risk | ||||
Net monetary assets | $ 317 | |||
Net revenues | $ 210 | |||
Exchange rate | 6.3 | 10 | ||
Official Rate | Scenario one | ||||
Concentration of Risk | ||||
Exchange rate | 10 | |||
Asset devaluation loss | $ 117 | |||
SICAD | ||||
Concentration of Risk | ||||
Exchange rate | 13.5 | |||
SIMADI | ||||
Concentration of Risk | ||||
Exchange rate | 200 | |||
SIMADI | Scenario two | ||||
Concentration of Risk | ||||
Exchange rate | 200 | |||
Asset devaluation loss | $ 307 | |||
Accounts Receivable | ||||
Concentration of Risk | ||||
Number of principal customers | customer | 3 | |||
Accounts Receivable | Geographic Concentration Risk | ||||
Concentration of Risk | ||||
Concentrations risk (as a percent) | 51.00% | 49.00% | ||
Sales Revenue Net | Product Concentration Risk | ||||
Concentration of Risk | ||||
Concentrations risk (as a percent) | 61.00% | 63.00% | 57.00% |
Post-Employment Benefits (Detai
Post-Employment Benefits (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair value of plan assets | |||||
Beginning of period | $ 4,174 | $ 4,174 | $ 4,173 | ||
End of period | 4,174 | $ 4,173 | |||
Amounts recognized in consolidated balance sheets | |||||
Long-term liabilities | $ (1,949) | (2,220) | |||
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 2064 and thereafter (as a percent) | 4.50% | ||||
Effect of 1% change in assumed health care cost trend rates | |||||
Effect of one percentage point increase, Service cost and interest cost | $ 12 | ||||
Effect of one percentage point decrease, Service cost and interest cost | (9) | ||||
Effect of one percentage point increase, Projected benefit obligation | 116 | ||||
Effect of one percentage point decrease, Projected benefit obligation | $ (90) | ||||
Forecast | |||||
Net Periodic Benefit Cost | |||||
Reduction of defined benefit plan net periodic benefit cost | 41 | ||||
Pre Sixty Five Years Of Age | |||||
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) | 7.50% | ||||
Post Sixty Five Years Of Age | |||||
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) | 8.30% | ||||
Annual rate of increase in the per capita cost of covered health care cost benefits assumed in the current year (as a percent) | 7.30% | ||||
AbbVie sponsored plans | |||||
Post-Employment Benefits | |||||
Accumulated benefit obligations | $ 4,800 | 5,000 | |||
Fair value of plan assets | |||||
Beginning of period | 640 | 640 | 474 | 411 | |
Company contribution | 150 | 370 | $ 145 | ||
End of period | 640 | 474 | 411 | ||
Net Periodic Benefit Cost | |||||
Company contribution | 150 | 370 | 145 | ||
AbbVie sponsored plans | Pension Plans Defined Benefit | |||||
Post-Employment Benefits | |||||
Defined benefit pension and other post-employment plans assets recognized | 214 | 210 | |||
Projected benefit obligations | |||||
Beginning of period | 5,387 | 5,387 | 5,681 | 4,484 | |
Employee contributions | 2 | 1 | |||
Plan amendments | 1 | ||||
Actuarial (gain) loss | (467) | 1,108 | |||
Benefits paid | (158) | (163) | |||
Other, primarily foreign currency translation loss | (117) | (140) | |||
End of period | 5,387 | 5,681 | 4,484 | ||
Fair value of plan assets | |||||
Beginning of period | 4,174 | 4,174 | 4,173 | 3,666 | |
Actual (loss) return on plan assets | (25) | 282 | |||
Company contribution | 217 | 430 | |||
Employee contributions | 2 | 1 | |||
Benefits paid | (158) | (163) | |||
Other, primarily foreign currency translation adjustments | (35) | (43) | |||
End of period | 4,174 | 4,173 | 3,666 | ||
Funded status at the end of the period | (1,213) | (1,508) | |||
Amounts recognized in consolidated balance sheets | |||||
Other assets | 214 | 210 | |||
Current liabilities | (24) | (26) | |||
Long-term liabilities | (1,403) | (1,692) | |||
Net liability at the end of the period | 1,213 | 1,508 | |||
Actuarial losses, net | 1,939 | 2,216 | |||
Prior service cost | 16 | 19 | |||
AOCI at the end of the period | 1,955 | 2,235 | |||
Pretax losses included in OCI | |||||
Actuarial (gain) loss | (117) | 1,127 | (715) | ||
Prior service cost | 1 | 15 | |||
Amortization of prior service cost and actuarial losses | (127) | (68) | (114) | ||
Foreign exchange loss | (37) | (41) | 2 | ||
Total pretax (gain) loss recognized in OCI | (281) | 1,019 | (812) | ||
Expected net periodic benefit cost | 87 | ||||
Net Periodic Benefit Cost | |||||
Service cost | 227 | 173 | 184 | ||
Interest cost | 219 | 217 | 196 | ||
Expected return on plan assets | (325) | (302) | (259) | ||
Amortization of actuarial losses (gain) and prior service costs | 127 | 68 | 114 | ||
Net periodic benefit cost | 248 | 156 | $ 235 | ||
Company contribution | $ 217 | $ 430 | |||
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date | |||||
Discount rate (as a percent) | 4.40% | 3.90% | |||
Rate of compensation increases (as a percent) | 4.40% | 4.40% | |||
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||||
Discount rate (as a percent) | 3.90% | 4.90% | 4.30% | ||
Expected long-term rate of return on plan assets (as a percent) | 7.80% | 7.90% | 8.20% | ||
Expected rate of change in compensation (as a percent) | 4.40% | 5.00% | 5.00% | ||
AbbVie sponsored plans | Other Postretirement Benefit Plans Defined Benefit | |||||
Projected benefit obligations | |||||
Beginning of period | 557 | 557 | $ 538 | $ 403 | |
Plan amendments | (13) | ||||
Actuarial (gain) loss | (17) | 111 | |||
Benefits paid | (11) | (8) | |||
Other, primarily foreign currency translation loss | (1) | 1 | |||
End of period | 557 | 538 | $ 403 | ||
Fair value of plan assets | |||||
Company contribution | 11 | 8 | |||
Benefits paid | (11) | (8) | |||
Funded status at the end of the period | (557) | (538) | |||
Amounts recognized in consolidated balance sheets | |||||
Current liabilities | (11) | (10) | |||
Long-term liabilities | (546) | (528) | |||
Net liability at the end of the period | 557 | 538 | |||
Actuarial losses, net | 154 | 181 | |||
Prior service cost | (45) | (53) | |||
AOCI at the end of the period | 109 | 128 | |||
Pretax losses included in OCI | |||||
Actuarial (gain) loss | (17) | 111 | (42) | ||
Prior service cost | (13) | (53) | |||
Amortization of prior service cost and actuarial losses | (2) | 3 | |||
Total pretax (gain) loss recognized in OCI | (19) | 101 | (95) | ||
Expected net periodic benefit cost | 1 | ||||
Net Periodic Benefit Cost | |||||
Service cost | 25 | 22 | 23 | ||
Interest cost | 23 | 22 | 19 | ||
Amortization of actuarial losses (gain) and prior service costs | 2 | (2) | (1) | ||
Net periodic benefit cost | 50 | 42 | $ 41 | ||
Company contribution | $ 11 | $ 8 | |||
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date | |||||
Discount rate (as a percent) | 4.90% | 4.50% | |||
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost | |||||
Discount rate (as a percent) | 4.50% | 5.30% | 4.50% | ||
AbbVie sponsored plans | Foreign Pension Plans Defined Benefit | |||||
Fair value of plan assets | |||||
Beginning of period | 1,500 | 1,500 | $ 1,400 | ||
End of period | 1,500 | $ 1,400 | |||
AbbVie sponsored plans | Defined Benefit Plan In Which Accumulated Benefit Obligation Exceeded Plan Assets | |||||
Post-Employment Benefits | |||||
Accumulated benefit obligations | 3,100 | ||||
Projected benefit obligations | |||||
Beginning of period | 3,600 | 3,600 | |||
End of period | 3,600 | ||||
Fair value of plan assets | |||||
Beginning of period | 2,200 | $ 2,200 | |||
End of period | $ 2,200 | ||||
Subsequent Event | AbbVie sponsored plans | |||||
Fair value of plan assets | |||||
Company contribution | 150 | ||||
Net Periodic Benefit Cost | |||||
Company contribution | $ 150 |
Post-Employment Benefits (Det63
Post-Employment Benefits (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | $ 4,173 | |
End of period | $ 4,174 | $ 4,173 |
Assets Of Defined Benefit Plans | Investment Concentration Risk | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Concentrations risk (as a percent) | 0.00% | |
U S Large Capital Equity Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | $ 1,314 | |
End of period | 1,041 | 1,314 |
U S Mid Capital Equity Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 267 | |
End of period | 260 | 267 |
International | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 608 | |
End of period | 688 | 608 |
U S Treasury And Government | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 216 | |
End of period | 178 | 216 |
Corporate Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 326 | |
End of period | 440 | 326 |
Non-U.S. Government Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 425 | |
End of period | 182 | 425 |
Other Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 37 | |
End of period | 156 | 37 |
Fixed Income Funds | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 848 | |
End of period | 1,097 | 848 |
Real Estate | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 53 | |
End of period | 39 | 53 |
Defined Benefit Plan Other Assets | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 79 | |
End of period | 93 | 79 |
Quoted prices in active markets for identical assets (Level 1) | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 1,212 | |
End of period | 1,074 | 1,212 |
Quoted prices in active markets for identical assets (Level 1) | U S Large Capital Equity Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 588 | |
End of period | 542 | 588 |
Quoted prices in active markets for identical assets (Level 1) | U S Mid Capital Equity Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 67 | |
End of period | 35 | 67 |
Quoted prices in active markets for identical assets (Level 1) | International | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 137 | |
End of period | 100 | 137 |
Quoted prices in active markets for identical assets (Level 1) | U S Treasury And Government | ||
Change in value of assets that are measured using significant unobservable inputs | ||
End of period | 15 | |
Quoted prices in active markets for identical assets (Level 1) | Corporate Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 101 | |
End of period | 124 | 101 |
Quoted prices in active markets for identical assets (Level 1) | Non-U.S. Government Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 201 | |
End of period | 33 | 201 |
Quoted prices in active markets for identical assets (Level 1) | Other Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 29 | |
End of period | 122 | 29 |
Quoted prices in active markets for identical assets (Level 1) | Fixed Income Funds | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 3 | |
End of period | 2 | 3 |
Quoted prices in active markets for identical assets (Level 1) | Real Estate | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 7 | |
End of period | 8 | 7 |
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 | ||
Beginning of period | 79 | |
End of period | 93 | 79 |
Significant other observable inputs (Level 2) | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 2,487 | |
End of period | 2,460 | 2,487 |
Significant other observable inputs (Level 2) | U S Large Capital Equity Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 726 | |
End of period | 499 | 726 |
Significant other observable inputs (Level 2) | U S Mid Capital Equity Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 200 | |
End of period | 225 | 200 |
Significant other observable inputs (Level 2) | International | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 471 | |
End of period | 588 | 471 |
Significant other observable inputs (Level 2) | U S Treasury And Government | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 216 | |
End of period | 163 | 216 |
Significant other observable inputs (Level 2) | Corporate Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 225 | |
End of period | 297 | 225 |
Significant other observable inputs (Level 2) | Non-U.S. Government Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 224 | |
End of period | 149 | 224 |
Significant other observable inputs (Level 2) | Other Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 8 | |
End of period | 34 | 8 |
Significant other observable inputs (Level 2) | Fixed Income Funds | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 371 | |
End of period | 498 | 371 |
Significant other observable inputs (Level 2) | Real Estate | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 46 | |
End of period | 7 | 46 |
Significant unobservable inputs (Level 3) | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 474 | |
End of period | 640 | 474 |
Significant unobservable inputs (Level 3) | Corporate Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
End of period | 19 | |
Significant unobservable inputs (Level 3) | Fixed Income Funds | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 474 | |
End of period | 597 | 474 |
Significant unobservable inputs (Level 3) | Real Estate | ||
Change in value of assets that are measured using significant unobservable inputs | ||
End of period | 24 | |
AbbVie sponsored plans | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 474 | 411 |
Actual return on plan assets on hand at year end | 5 | 21 |
Purchases, sales and settlements, net | 161 | 42 |
End of period | 640 | 474 |
Pension Plans Defined Benefit | ||
Expected Pension and Other Post-Employment Payments | ||
2,016 | 168 | |
2,017 | 177 | |
2,018 | 188 | |
2,019 | 199 | |
2,020 | 212 | |
2021 to 2025 | 1,295 | |
Pension Plans Defined Benefit | AbbVie sponsored plans | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Beginning of period | 4,173 | 3,666 |
End of period | $ 4,174 | $ 4,173 |
Pension Plans Defined Benefit | 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) | 35.00% | |
Pension Plans Defined Benefit | AbbVie sponsored plans | Debt Securities | ||
Change in value of assets that are measured using significant unobservable inputs | ||
Target investment allocations for Pension Plan (as a percent) | 20.00% | |
Pension Plans Defined Benefit | 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) | 45.00% | |
Other Postretirement Benefit Plans Defined Benefit | ||
Expected Pension and Other Post-Employment Payments | ||
2,016 | $ 11 | |
2,017 | 14 | |
2,018 | 17 | |
2,019 | 20 | |
2,020 | 19 | |
2021 to 2025 | $ 133 |
Post-Employment Benefits (Det64
Post-Employment Benefits (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Abbott Laboratories Stock Retirement Plan | |||
Other | |||
Expenses recorded | $ 73 | $ 67 | $ 62 |
Equity (Details)
Equity (Details) $ / shares in Units, $ in Millions | Jan. 02, 2013item | Dec. 31, 2015USD ($)item$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / shares | Dec. 31, 2015USD ($)item$ / sharesshares |
Stock-Based Compensation | |||||
Stock compensation expense recognized | $ | $ 282 | $ 241 | $ 212 | ||
Tax benefit on stock compensation expense | $ | $ 89 | 73 | 68 | ||
Retirement-eligible employees' age | item | 55 | ||||
Minimum number of years of services | 10 years | ||||
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 | $ | $ 61 | $ 56 | $ 38 | ||
Abbott Laboratories | |||||
Stock-Based Compensation | |||||
Number of awards received in connection with the separation | item | 1 | ||||
Number of awards granted to employees other than in connection with the separation | 0 | ||||
Employee Stock Option | |||||
Stock-Based Compensation | |||||
Exercise price for awards granted as percentage of market value on the date of grant | 100.00% | ||||
Contractual term | 10 years | ||||
Incremental vesting | item | 0.33 | ||||
Vesting period | 3 years | ||||
Weighted-average grant-date fair value of the stock options granted | $ / shares | $ 9.96 | $ 9.83 | $ 6.87 | ||
Options | |||||
Outstanding at the beginning of the period (in shares) | 28,280,000 | ||||
Granted (in shares) | 1,207,000 | ||||
Exercised (in shares) | (5,871,000) | ||||
Lapsed (in shares) | (47,000) | ||||
Outstanding at the end of the period (in shares) | 23,569,000 | 28,280,000 | |||
Exercisable at the end of the period (in shares) | 21,091,000 | ||||
Weighted average exercise price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 28.53 | ||||
Granted (in dollars per share) | $ / shares | 58.83 | ||||
Exercised (in dollars per share) | $ / shares | 26.31 | ||||
Lapsed (in dollars per share) | $ / shares | 27.50 | ||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 30.64 | $ 28.53 | |||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 28.16 | ||||
Weighted average remaining life (in years) | |||||
Outstanding at the end of the period | 3 years | 3 years 3 months 18 days | |||
Exercisable at end of the period | 2 years 4 months 24 days | ||||
Aggregate intrinsic value | |||||
Outstanding at the beginning of the period | $ | $ 1,044 | ||||
Outstanding at the end of the period | $ | 1,044 | $ 1,044 | $ 674 | ||
Exercisable at the end of the period | $ | 656 | ||||
Additional information | |||||
Aggregate intrinsic value of options exercised | $ | 216 | 253 | $ 229 | ||
Total fair value of options vested | $ | $ 10 | ||||
Restricted Stock And Restricted Stock Units | |||||
Additional information | |||||
Period for recognition of unrecognized compensation cost | 2 years | ||||
Additional information | |||||
Fair market value of awards vested | $ | $ 335 | $ 338 | $ 285 | ||
Unrecognized compensation cost | $ | $ 239 | ||||
Period for recognition of unrecognized compensation cost | 2 years | ||||
Restricted Stock | Minimum | |||||
Stock-Based Compensation | |||||
Vesting period | 3 years | ||||
Restricted Stock Units R S U | |||||
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) | 6,052,000 | ||||
Vested (in shares) | (5,702,000) | ||||
Lapsed (in shares) | (675,000) | ||||
Outstanding at the end of the period (in shares) | 12,490,000 | 12,815,000 | |||
Weighted average grant date fair value | |||||
Granted (in dollars per share) | $ / shares | $ 60.85 | ||||
Vested (in dollars per share) | $ / shares | 37.46 | ||||
Lapsed (in dollars per share) | $ / shares | 51.11 | ||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 51.66 | $ 40.98 |
Equity (Details 2)
Equity (Details 2) - $ / shares | Nov. 16, 2015 | Aug. 14, 2015 | May. 15, 2015 | Feb. 13, 2015 | Feb. 13, 2015 | Nov. 17, 2014 | Nov. 17, 2014 | Aug. 15, 2014 | May. 15, 2014 | Feb. 14, 2014 | Jan. 04, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | [1] |
Cash Dividends | ||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 0.40 | $ 0.57 | $ 0.51 | $ 0.51 | $ 0.51 | $ 0.49 | $ 0.42 | $ 0.42 | $ 0.42 | $ 2.10 | $ 1.75 | $ 2 | ||||||||||||
Dividend Paid Quarter One | ||||||||||||||||||||||||
Dividends Payable | ||||||||||||||||||||||||
Date declared | Feb. 19, 2015 | Feb. 20, 2014 | ||||||||||||||||||||||
Date paid | May 15, 2015 | May 15, 2014 | ||||||||||||||||||||||
Cash Dividends | ||||||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.51 | $ 0.42 | ||||||||||||||||||||||
Percentage increase in dividends declared | 4.00% | |||||||||||||||||||||||
Dividend Paid Quarter Two | ||||||||||||||||||||||||
Dividends Payable | ||||||||||||||||||||||||
Date declared | Jun. 18, 2015 | Jun. 19, 2014 | ||||||||||||||||||||||
Date paid | Aug. 14, 2015 | Aug. 15, 2014 | ||||||||||||||||||||||
Cash Dividends | ||||||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.51 | $ 0.42 | ||||||||||||||||||||||
Dividend Paid Quarter Three | ||||||||||||||||||||||||
Dividends Payable | ||||||||||||||||||||||||
Date declared | Sep. 11, 2015 | Sep. 19, 2014 | ||||||||||||||||||||||
Date paid | Nov. 16, 2015 | Nov. 17, 2014 | ||||||||||||||||||||||
Cash Dividends | ||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 0.51 | |||||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.51 | $ 0.42 | $ 0.42 | |||||||||||||||||||||
Dividend Paid Quarter Four | ||||||||||||||||||||||||
Dividends Payable | ||||||||||||||||||||||||
Date declared | Oct. 30, 2015 | Oct. 20, 2014 | Dec. 12, 2013 | |||||||||||||||||||||
Date of record | Jan. 15, 2016 | |||||||||||||||||||||||
Date paid | Feb. 16, 2016 | Feb. 13, 2015 | Feb. 14, 2014 | |||||||||||||||||||||
Cash Dividends | ||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 0.57 | |||||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.49 | $ 0.49 | $ 0.40 | |||||||||||||||||||||
Percentage increase in dividends declared | 12.00% | 17.00% | ||||||||||||||||||||||
[1] | On January 4, 2013, a cash dividend of $0.40 per share of common stock was declared from pre-separation earnings and was recorded as a reduction of additional paid-in capital. |
Equity (Details 3)
Equity (Details 3) - USD ($) shares in Millions, $ in Millions | May. 27, 2015 | May. 26, 2015 | Jan. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | Oct. 20, 2014 | Feb. 15, 2013 |
Stock Repurchase Program | |||||||||
Amount authorized under stock repurchase program | $ 5,000 | $ 5,000 | $ 1,500 | ||||||
Shares repurchased | 46 | 9 | 4 | ||||||
Payment for shares repurchased on the open market | $ 300 | $ 2,800 | $ 550 | $ 223 | |||||
Share repurchase authorization amount remaining | 1,900 | ||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | 3,945 | 1,742 | 4,492 | ||||||
Other comprehensive (loss) income | (530) | (1,589) | 570 | ||||||
Ending balance | 3,945 | 1,742 | 4,492 | ||||||
Morgan Stanley & Co. LLC | |||||||||
Stock Repurchase Program | |||||||||
Amount authorized under stock repurchase program | $ 5,000 | ||||||||
Shares repurchased | 68 | 5 | |||||||
Percentage of initial delivery of shares | 90.00% | ||||||||
Reduction in common stock additional paid in capital | 5,000 | ||||||||
Payment for shares repurchased on the open market | $ 5,000 | ||||||||
Accumulated Other Comprehensive Income | |||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | (2,561) | (2,031) | (442) | (350) | |||||
Other comprehensive (loss) income before reclassifications | (350) | (1,712) | 491 | ||||||
Net losses (gains) reclassified from accumulated other comprehensive loss | 180 | (123) | (79) | ||||||
Other comprehensive (loss) income | (530) | (1,589) | 570 | ||||||
Separation-related adjustments | (662) | ||||||||
Ending balance | (2,561) | (2,031) | (442) | ||||||
Accumulated Translation Adjustment | |||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | (1,270) | (603) | 470 | 181 | |||||
Other comprehensive (loss) income before reclassifications | (667) | (1,073) | 48 | ||||||
Other comprehensive (loss) income | (667) | (1,073) | 48 | ||||||
Separation-related adjustments | 241 | ||||||||
Ending balance | (1,270) | (603) | 470 | ||||||
Other comprehensive income (loss) due to Euro-denominated assets | 667 | ||||||||
Accumulated Defined Benefit Plans Adjustment | |||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | (1,378) | (1,608) | (827) | (511) | |||||
Other comprehensive (loss) income before reclassifications | 147 | (827) | 519 | ||||||
Net losses (gains) reclassified from accumulated other comprehensive loss | (83) | (46) | (79) | ||||||
Other comprehensive (loss) income | 230 | (781) | 598 | ||||||
Separation-related adjustments | (914) | ||||||||
Ending balance | (1,378) | (1,608) | (827) | ||||||
Accumulated Net Unrealized Investment Gain Loss | |||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | 47 | 3 | 2 | 1 | |||||
Other comprehensive (loss) income before reclassifications | 48 | 1 | 1 | ||||||
Net losses (gains) reclassified from accumulated other comprehensive loss | 4 | ||||||||
Other comprehensive (loss) income | 44 | 1 | 1 | ||||||
Ending balance | 47 | 3 | 2 | ||||||
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges | |||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | 40 | 177 | (87) | (21) | |||||
Other comprehensive (loss) income before reclassifications | 122 | 187 | (77) | ||||||
Net losses (gains) reclassified from accumulated other comprehensive loss | 259 | (77) | |||||||
Other comprehensive (loss) income | (137) | 264 | (77) | ||||||
Separation-related adjustments | 11 | ||||||||
Ending balance | $ 40 | $ 177 | $ (87) | ||||||
Common Stock | |||||||||
Stock Repurchase Program | |||||||||
Shares repurchased | 119 | 9 | 4 | ||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | 17 | $ 16 | $ 16 | ||||||
Ending balance | 17 | 16 | $ 16 | ||||||
Additional Paid In Capital | |||||||||
Changes in accumulated other comprehensive Income | |||||||||
Beginning balance | $ 13,080 | 4,194 | 3,671 | ||||||
Ending balance | $ 13,080 | $ 4,194 | $ 3,671 |
Equity (Details 4)
Equity (Details 4) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | 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 | ||
Accumulated Defined Benefit Plans Adjustment | Reclassification Out Of Accumulated Other Comprehensive Income | |||
Significant amounts reclassified out of each component of AOCI | |||
Amortization of actuarial losses and other | $ 129 | $ 66 | $ 114 |
Less tax benefit | (46) | (20) | (35) |
Total reclassification, net of tax | 83 | 46 | $ 79 |
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges | Reclassification Out Of Accumulated Other Comprehensive Income | |||
Significant amounts reclassified out of each component of AOCI | |||
(Gains) losses on designated cash flow hedges | 265 | (79) | |
Less tax expense | (6) | 2 | |
Total reclassification, net of tax | $ 259 | $ (77) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Before Income Taxes | |||
Domestic | $ (1,038) | $ (3,245) | $ (581) |
Foreign | 7,683 | 5,614 | 5,913 |
Total earnings before income taxes | 6,645 | 2,369 | 5,332 |
Current | |||
Domestic | 1,036 | 634 | 226 |
Foreign | 313 | 341 | 354 |
Total current taxes | 1,349 | 975 | 580 |
Deferred | |||
Domestic | 141 | (301) | 678 |
Foreign | 11 | (79) | (54) |
Total deferred taxes | 152 | (380) | 624 |
Total income taxes | $ 1,501 | $ 595 | $ 1,204 |
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) | 0.10% | 0.30% | |
Effect of foreign operations (as a percent) | (9.40%) | (11.30%) | (11.50%) |
U.S. tax credits (as a percent) | (4.50%) | (8.90%) | (2.70%) |
Branded prescription drug fee (as a percent) | 0.70% | 3.70% | 0.40% |
Valuation allowances (as a percent) | (1.60%) | 3.60% | 0.10% |
All other, net (as a percent) | 2.30% | 3.00% | 1.00% |
Effective tax rate (as a percent) | 22.60% | 25.10% | 22.60% |
Deferred tax assets | |||
Compensation and employee benefits | $ 584 | $ 627 | |
Accruals and reserves | 368 | 376 | |
Chargebacks and rebates | 472 | 297 | |
Deferred revenue | 372 | 382 | |
Depreciation | 45 | 53 | |
Net operating losses and other credit carryforwards | 282 | 125 | |
Other | 316 | 292 | |
Total deferred tax assets | 2,439 | 2,152 | |
Reversal of Valuation allowances | (70) | (172) | |
Total net deferred tax assets | 2,369 | 1,980 | |
Deferred tax liabilities | |||
Excess of book basis over tax basis of intangible assets | (4,459) | (331) | |
Excess of book basis over tax basis in investments | (2,958) | (326) | |
Total deferred tax liabilities | (7,417) | (657) | |
Deferred tax liabilities net | $ (5,048) | ||
Net deferred tax asset | $ 1,323 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income taxes | ||
Tax rate reconciliation due to additional non-deductible expenses | $ 129 | |
State And Local Jurisdiction | ||
Income taxes | ||
Tax rate reconciliation due to tax (benefit) or expenses relating to valuation allowance | $ (103) | $ 129 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Tax credit carryforwards | ||
Operating loss carryforwards | $ 293 | |
Tax credit carryforwards | 147 | |
Valuation allowances | 70 | $ 172 |
Foreign Country | ||
Tax credit carryforwards | ||
Operating loss carryforwards | 232 | |
Operating loss carryforwards with expiration between 2018 and 2023 | 177 | |
State And Local Jurisdiction | ||
Tax credit carryforwards | ||
Operating loss carryforwards | 1,300 | |
Tax credit carryforwards | $ 152 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes | |||
Undistributed foreign earnings, indefinitely reinvested for continued use in foreign operations | $ 25,000 | ||
Unrecognized Tax Benefits | |||
Balance at the beginning of the period | 421 | $ 247 | $ 1,140 |
Increase due to current year tax positions | 187 | 115 | 195 |
Increase due to prior year tax positions | 369 | 67 | |
Decrease due to prior year tax positions | (15) | (6) | |
Lapse of statutes of limitations | (8) | (2) | |
Separation-related adjustments | (1,088) | ||
Balance at the end of the period | 954 | 421 | 247 |
Reimbursement receivable for unrecognized tax benefits and related interest and penalties for periods after separation | 107 | ||
Net amount of potential tax benefits that would impact the entity's effective tax rate | 901 | 389 | |
Reasonably possible amount that gross unrecognized tax benefits may change within the next twelve months, high end of range | 15 | ||
Interest and penalties | 13 | 10 | 3 |
Accrued interest and penalties | $ 83 | $ 25 | $ 15 |
Legal Proceedings and Conting73
Legal Proceedings and Contingencies (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Nov. 30, 2014item | Sep. 30, 2014item | Dec. 31, 2015USD ($)item | |
Legal Proceedings and Contingencies | |||
Recorded accrual balance for litigation | $ | $ 166 | ||
Number of individual putative class action lawsuit | 5 | ||
Number of cases pending | 715 | ||
Testosterone Replacement Therapy Products Liability Litigation | |||
Legal Proceedings and Contingencies | |||
Number of cases pending | 170 | ||
Numbers of cases are consolidated for pre-trial purposes | 2,500 | ||
Depakote | |||
Legal Proceedings and Contingencies | |||
Percentage of pending claims in US District Courts | 90.00% | ||
Patent Litigation | Andro Gel 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 | 4 | ||
Number of purported class actions | 6 | ||
Patent Litigation | Niaspan | |||
Legal Proceedings and Contingencies | |||
Number of individual plaintiff lawsuits | 3 | ||
Number of purported class actions | 2 | ||
Allegation Of Proposed Generic Products Infringing Patents And Seeking Declaratory And Injunctive Relief | Andro Gel Antitrust Litigation | |||
Legal Proceedings and Contingencies | |||
Number of generic companies with whom certain litigation related agreements were entered into | 2 |
Segment and Geographic Area I74
Segment and Geographic Area Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segmentcustomer | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment and Geographic Area Information | |||||||||||
Number of Operating Segments | segment | 1 | ||||||||||
Number of principal customers | customer | 3 | ||||||||||
Segment Information | |||||||||||
Net revenues | $ 6,400 | $ 5,944 | $ 5,475 | $ 5,040 | $ 5,452 | $ 5,019 | $ 4,926 | $ 4,563 | $ 22,859 | $ 19,960 | $ 18,790 |
Revenue, Net | $ 6,400 | $ 5,944 | $ 5,475 | $ 5,040 | $ 5,452 | $ 5,019 | $ 4,926 | $ 4,563 | 22,859 | 19,960 | 18,790 |
H U M I R A | |||||||||||
Segment Information | |||||||||||
Net revenues | 14,012 | 12,543 | 10,659 | ||||||||
Revenue, Net | 14,012 | 12,543 | 10,659 | ||||||||
IMBRUVICA | |||||||||||
Segment Information | |||||||||||
Net revenues | 754 | ||||||||||
Revenue, Net | 754 | ||||||||||
VIEKIRA | |||||||||||
Segment Information | |||||||||||
Net revenues | 1,639 | 48 | |||||||||
Revenue, Net | 1,639 | 48 | |||||||||
Creon | |||||||||||
Segment Information | |||||||||||
Net revenues | 632 | 516 | 412 | ||||||||
Revenue, Net | 632 | 516 | 412 | ||||||||
Synagis | |||||||||||
Segment Information | |||||||||||
Net revenues | 740 | 835 | 827 | ||||||||
Revenue, Net | 740 | 835 | 827 | ||||||||
Lupron | |||||||||||
Segment Information | |||||||||||
Net revenues | 826 | 778 | 785 | ||||||||
Revenue, Net | 826 | 778 | 785 | ||||||||
Synthroid | |||||||||||
Segment Information | |||||||||||
Net revenues | 755 | 709 | 622 | ||||||||
Revenue, Net | 755 | 709 | 622 | ||||||||
Kaletra | |||||||||||
Segment Information | |||||||||||
Net revenues | 700 | 870 | 962 | ||||||||
Revenue, Net | 700 | 870 | 962 | ||||||||
Andro Gel | |||||||||||
Segment Information | |||||||||||
Net revenues | 694 | 934 | 1,035 | ||||||||
Revenue, Net | 694 | 934 | 1,035 | ||||||||
Sevoflurane | |||||||||||
Segment Information | |||||||||||
Net revenues | 474 | 550 | 568 | ||||||||
Revenue, Net | 474 | 550 | 568 | ||||||||
Duodopa | |||||||||||
Segment Information | |||||||||||
Net revenues | 231 | 220 | 178 | ||||||||
Revenue, Net | 231 | 220 | 178 | ||||||||
Dyslipidemia Products | |||||||||||
Segment Information | |||||||||||
Net revenues | 179 | 328 | 1,076 | ||||||||
Revenue, Net | 179 | 328 | 1,076 | ||||||||
Other Products | |||||||||||
Segment Information | |||||||||||
Net revenues | 1,223 | 1,629 | 1,666 | ||||||||
Revenue, Net | $ 1,223 | $ 1,629 | $ 1,666 |
Segment and Geographic Area I75
Segment and Geographic Area Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure based on the country that sold the product | |||||||||||
Net revenues | $ 6,400 | $ 5,944 | $ 5,475 | $ 5,040 | $ 5,452 | $ 5,019 | $ 4,926 | $ 4,563 | $ 22,859 | $ 19,960 | $ 18,790 |
Long-lived assets | 2,600 | 2,500 | 2,600 | 2,500 | |||||||
United States | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 13,561 | 10,845 | 10,181 | ||||||||
Germany | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 1,082 | 1,035 | 911 | ||||||||
United Kingdom | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 688 | 722 | 606 | ||||||||
Spain | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 618 | 534 | 543 | ||||||||
Japan | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 599 | 581 | 625 | ||||||||
France | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 597 | 584 | 540 | ||||||||
Canada | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 551 | 551 | 538 | ||||||||
Italy | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 452 | 432 | 404 | ||||||||
Brazil | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 376 | 435 | 439 | ||||||||
The Netherlands | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 334 | 345 | 332 | ||||||||
Other Countries | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Net revenues | 4,001 | 3,896 | $ 3,671 | ||||||||
United States And Puerto Rico | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Long-lived assets | 1,900 | 1,800 | 1,900 | 1,800 | |||||||
Europe | |||||||||||
Disclosure based on the country that sold the product | |||||||||||
Long-lived assets | $ 513 | $ 551 | $ 513 | $ 551 |
Quarterly Financial Data (una76
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | May. 15, 2015 | May. 15, 2014 | Jan. 04, 2013 | Oct. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net revenues | $ 6,400 | $ 5,944 | $ 5,475 | $ 5,040 | $ 5,452 | $ 5,019 | $ 4,926 | $ 4,563 | $ 22,859 | $ 19,960 | $ 18,790 | |||||
Gross margin | 4,925 | 4,777 | 4,559 | 4,098 | 4,333 | 3,925 | 3,813 | 3,463 | ||||||||
Net earnings | $ 1,517 | $ 1,239 | $ 1,366 | $ 1,022 | $ (810) | $ 506 | $ 1,098 | $ 980 | $ 5,144 | $ 1,774 | $ 4,128 | |||||
Basic earnings per share (in dollars per share) | $ 0.93 | $ 0.75 | $ 0.84 | $ 0.64 | $ (0.51) | $ 0.32 | $ 0.69 | $ 0.61 | $ 3.15 | $ 1.11 | $ 2.58 | |||||
Diluted earnings per share (in dollars per share) | 0.92 | 0.74 | 0.83 | 0.63 | (0.51) | 0.31 | 0.68 | 0.61 | 3.13 | 1.10 | 2.56 | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.40 | $ 0.57 | $ 0.51 | $ 0.51 | $ 0.51 | $ 0.49 | $ 0.42 | $ 0.42 | $ 0.42 | $ 2.10 | $ 1.75 | $ 2 | [1] | |||
Royalty revenue | $ 81 | |||||||||||||||
Milestone revenue | $ 40 | |||||||||||||||
Increase litigation reserves | $ 101 | |||||||||||||||
Cash Dividends | ||||||||||||||||
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 36 | |||||||||||||||
C2N Diagnostics | ||||||||||||||||
Initial upfront payment | $ 100 | |||||||||||||||
HCV | ||||||||||||||||
Payments to collaborators | $ 40 | |||||||||||||||
Rare Pediatric Disease Priority Review Voucher From United Therapeutics Corporation | ||||||||||||||||
Research and development expense | $ 350 | |||||||||||||||
Calico Life Sciences LLC | ||||||||||||||||
Initial upfront payment | 500 | 250 | ||||||||||||||
Research and development expense | $ 500 | |||||||||||||||
Payments to collaborators | $ 250 | |||||||||||||||
Infinity Pharmaceuticals Inc | ||||||||||||||||
Payments to collaborators | 83 | 173 | ||||||||||||||
Dividend Paid Quarter One | ||||||||||||||||
Cash Dividends | ||||||||||||||||
Date declared | Feb. 19, 2015 | Feb. 20, 2014 | ||||||||||||||
Dividends paid (in dollars per share) | $ 0.51 | $ 0.42 | ||||||||||||||
Pharmacyclics Inc | ||||||||||||||||
Net revenues | $ 774 | |||||||||||||||
Acquisition-related and financing-related costs | $ 68 | $ 85 | $ 215 | $ 41 | ||||||||||||
Shire plc | ||||||||||||||||
Foreign exchange loss associated with forward contracts | $ (170) | (490) | ||||||||||||||
Acquisition-related and financing-related costs | $ 1,800 | |||||||||||||||
Break fee | $ 1,600 | $ 1,600 | ||||||||||||||
Shire plc | Calico Life Sciences LLC | ||||||||||||||||
Payments to collaborators | $ 172 | |||||||||||||||
[1] | 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. |