Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document and Entity Information | ' |
Entity Registrant Name | 'AbbVie Inc. |
Entity Central Index Key | '0001551152 |
Document Type | '10-Q |
Document Period End Date | 30-Sep-13 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 1,590,861,812 |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'Q3 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Earnings (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Condensed Consolidated Statements of Earnings | ' | ' | ' | ' | ||||
Net sales | $4,658 | $4,508 | $13,679 | $13,174 | ||||
Cost of products sold | 1,092 | 1,014 | 3,299 | 3,243 | ||||
Selling, general and administrative | 1,261 | 1,085 | 3,904 | 3,578 | ||||
Research and development | 714 | 813 | 2,057 | 2,097 | ||||
Acquired in-process research and development | 220 | ' | 290 | 260 | ||||
Total operating costs and expenses | 3,287 | 2,912 | 9,550 | 9,178 | ||||
Operating earnings | 1,371 | 1,596 | 4,129 | 3,996 | ||||
Interest expense (income), net | 69 | -1 | 210 | -4 | ||||
Net foreign exchange loss | 11 | 6 | 40 | 27 | ||||
Other expense (income), net | 5 | -13 | -14 | -39 | ||||
Earnings before income tax expense | 1,286 | 1,604 | 3,893 | 4,012 | ||||
Income tax expense | 322 | 19 | 893 | 277 | ||||
Net earnings | $964 | $1,585 | $3,000 | $3,735 | ||||
Basic earnings per share (in dollars per share) | $0.60 | $1.01 | $1.88 | $2.37 | ||||
Diluted earnings per share (in dollars per share) | $0.60 | $1.01 | $1.86 | $2.37 | ||||
Cash dividends declared per common share (in dollars per share) | $0.40 | ' | $1.60 | ' | ||||
Weighted-average basic shares outstanding (in shares) | 1,590 | [1] | 1,577 | [1] | 1,588 | [1] | 1,577 | [1] |
Weighted-average diluted shares outstanding (in shares) | 1,605 | [1] | 1,577 | [1] | 1,602 | [1] | 1,577 | [1] |
[1] | On January 1, 2013, Abbott Laboratories distributed 1,577 million shares of AbbVie common stock. The computation of basic and diluted earnings per common share for all periods through December 31, 2012 is calculated using the shares distributed on January 1, 2013. Refer to Note 3 for information regarding the calculation of basic and diluted earnings per common share for the three and nine months ended September 30, 2013. |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Earnings (Parenthetical) (Abbott Laboratories, AbbVie common stock) | 0 Months Ended |
In Millions, unless otherwise specified | Jan. 02, 2013 |
Abbott Laboratories | AbbVie common stock | ' |
Common stock, shares distributed | 1,577 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Net earnings | $964 | $1,585 | $3,000 | $3,735 |
Foreign currency translation gain (loss) adjustments | 205 | 305 | 23 | -3 |
Pension and post-employment benefits, net of tax expense of $_ and $1 for the three months ended September 30, 2013 and 2012, respectively, and $18 and $1 for the nine months ended September 30, 2013 and 2012, respectively | 42 | 1 | 77 | 2 |
Unrealized gains (losses) on marketable equity securities, net of tax (benefits) of $_ and $(13) for the three months ended September 30, 2013 and 2012, respectively, and $_ and $(9) for the nine months ended September 30, 2013 and 2012, respectively | 1 | -21 | ' | -15 |
Hedging activities, net of tax (benefits) of $(2) and $(3) for the three months ended September 30, 2013 and 2012, respectively, and $_ and $(2) for the nine months ended September 30, 2013 and 2012, respectively | -60 | -4 | -49 | -3 |
Other comprehensive income (loss) | 188 | 281 | 51 | -19 |
Comprehensive income | $1,152 | $1,866 | $3,051 | $3,716 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Condensed Consolidated Statements of Comprehensive Income | ' | ' | ' | ' |
Pension and post-employee benefits, taxes | ' | $1 | $18 | $1 |
Unrealized losses (gains) on marketable equity securities, tax (benefits) | ' | -13 | ' | -9 |
Hedging activities, tax (benefits) | ($2) | ($3) | ' | ($2) |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities | ' | ' |
Net earnings | $3,000 | $3,735 |
Adjustments to reconcile net earnings to net cash from operating activities: | ' | ' |
Depreciation | 289 | 352 |
Amortization of intangible assets | 408 | 489 |
Stock-based compensation | 175 | 156 |
Acquired in-process research and development | 290 | 260 |
Other, net | 28 | 38 |
Changes in operating assets and liabilities, net of acquisitions: | ' | ' |
Accounts and other receivables | 654 | 713 |
Inventories | -86 | -99 |
Prepaid expenses and other assets | 37 | -6 |
Accounts payable and other liabilities | 227 | -234 |
Cash flows from operating activities | 5,022 | 5,404 |
Cash flows from investing activities | ' | ' |
Acquisitions and investments, net of cash acquired | -358 | -780 |
Acquisitions of property and equipment | -340 | -238 |
Purchases of investment securities | -631 | -1,825 |
Sales of investment securities | 2,085 | 630 |
Other | ' | 1 |
Cash flows from investing activities | 756 | -2,212 |
Cash flows from financing activities | ' | ' |
Net change in short-term borrowings | -603 | ' |
Dividends paid | -1,914 | ' |
Purchases of treasury stock | -119 | ' |
Proceeds from the exercise of stock options | 244 | ' |
Net transactions with Abbott Laboratories, excluding noncash items | -227 | -446 |
Other, net | -76 | -12 |
Cash flows from financing activities | -2,695 | -458 |
Effect of exchange rate changes on cash and equivalents | -9 | ' |
Net increase in cash and equivalents | 3,074 | 2,734 |
Cash and equivalents, beginning of period | 5,901 | 27 |
Cash and equivalents, end of period | $8,975 | $2,761 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and equivalents | $8,975 | $5,901 |
Short-term investments | 621 | 2,075 |
Accounts and other receivables, net | 3,798 | 4,298 |
Inventories, net | 1,172 | 1,091 |
Deferred income taxes | 1,419 | 1,446 |
Prepaid expenses and other | 558 | 543 |
Total current assets | 16,543 | 15,354 |
Investments | 123 | 119 |
Property and equipment, net | 2,244 | 2,247 |
Intangible assets, net of amortization | 1,993 | 2,323 |
Goodwill | 6,199 | 6,130 |
Other assets | 1,150 | 835 |
Total assets | 28,252 | 27,008 |
Current liabilities | ' | ' |
Short-term borrowings | 411 | 1,020 |
Current maturities of long-term debt and lease obligations | 23 | 22 |
Accounts payable and accrued liabilities | 6,441 | 5,734 |
Total current liabilities | 6,875 | 6,776 |
Long-term liabilities | 3,425 | 2,239 |
Long-term debt and lease obligations | 14,375 | 14,630 |
Commitments and contingencies | ' | ' |
Equity | ' | ' |
Net parent company investment in AbbVie Inc., prior to separation | ' | 3,713 |
Stockholders' equity | ' | ' |
Common stock, issued 1,590,861,812 shares in 2013 | 16 | ' |
Common stock held in treasury, 3,100,129 shares in 2013 | -119 | ' |
Additional paid-in-capital | 3,580 | ' |
Retained earnings | 1,081 | ' |
Accumulated other comprehensive loss | -981 | -350 |
Total stockholders' equity | 3,577 | -350 |
Total equity | 3,577 | 3,363 |
Total liabilities and equity | $28,252 | $27,008 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) | Sep. 30, 2013 |
Condensed Consolidated Balance Sheets | ' |
Common stock, issued (in shares) | 1,590,861,812 |
Common stock held in treasury (in shares) | 3,100,129 |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statement of Equity (USD $) | Total | Common stock | Treasury stock | Additional paid-in capital | Accumulated other comprehensive (loss) | Retained earnings | Net parent company investment |
In Millions, unless otherwise specified | |||||||
Balance at Dec. 31, 2012 | $3,363 | ' | ' | ' | ($350) | ' | $3,713 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Separation-related adjustments | -1,233 | ' | ' | -1,258 | -682 | ' | 707 |
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 | 3,000 | ' | ' | ' | ' | 3,000 | ' |
Other comprehensive income, net of tax | 51 | ' | ' | ' | 51 | ' | ' |
Dividends declared | -1,919 | ' | ' | ' | ' | -1,919 | ' |
Stock issued (purchased) under incentive stock programs and other | 315 | ' | -119 | 434 | ' | ' | ' |
Stock issued (purchased) under incentive stock programs and other (in shares) | ' | 11 | ' | ' | ' | ' | ' |
Balance (in shares) at Sep. 30, 2013 | ' | 1,588 | ' | ' | ' | ' | ' |
Balance at Sep. 30, 2013 | $3,577 | $16 | ($119) | $3,580 | ($981) | $1,081 | ' |
Background_and_Basis_of_Presen
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
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 proprietary pharmaceutical products. Substantially all of AbbVie’s sales in the United States (U.S.) are to three wholesalers. Outside the U.S., products are sold primarily to health care providers or through distributors, depending on the market served. | |
On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories (Abbott) of 100 percent of the outstanding common stock of AbbVie to Abbott’s shareholders (the separation). AbbVie was incorporated in Delaware on April 10, 2012. Abbott’s Board of Directors approved the distribution of its shares of AbbVie on November 28, 2012. AbbVie’s registration statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission (SEC) on December 7, 2012. On January 1, 2013, Abbott’s shareholders of record as of the close of business on December 12, 2012 received one share of AbbVie common stock for every one share of Abbott common stock held as of the record date. AbbVie’s common stock began trading “regular-way” under the ticker symbol “ABBV” on the New York Stock Exchange on January 2, 2013. | |
During the nine months ended September 30, 2013, separation-related adjustments totaling $1.2 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, the transfer of certain pension plan liabilities and assets from Abbott to AbbVie upon the legal split of those plans in the first quarter, and the subsequent correction of an error in the third quarter related to long-term deferred tax assets transferred to the company in connection with the separation of the pension plans. The correction of this error, which did not impact the company’s Annual Report on Form 10-K for the year ended December 31, 2012 and prior years, resulted in a $582 million reduction to stockholders’ equity and long-term deferred tax assets, classified in other assets, in the company’s condensed consolidated balance sheet in the third quarter. In addition, because the historical financial statements were derived from Abbott’s records, separation-related adjustments also included an adjustment to accumulated other comprehensive loss to reflect the appropriate opening balances associated with currency translation adjustments related to AbbVie’s legal entities at the separation date. Additional separation-related adjustments to stockholders’ equity could be recorded in the future as the separation is finalized. Refer to Note 9 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 has historically received from Abbott. Such services include information technology, accounts payable, payroll, receivables collection, treasury and other financial functions, as well as order entry, warehousing, engineering support, quality assurance support and other administrative services. These agreements facilitate the separation by allowing AbbVie to operate independently prior to establishing stand-alone back office systems across its organization. Transition services may be provided for up to 24 months, with an option for a one-year extension. | |
During the three and nine months ended September 30, 2013, AbbVie incurred $51 million and $151 million of separation-related expenses, including legal, information technology and regulatory fees, which were principally classified in selling, general and administrative expenses (SG&A). | |
Basis of Presentation | |
The unaudited interim condensed consolidated financial statements of AbbVie have been prepared pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (GAAP) in the United States have been omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the company’s audited combined financial statements and notes included in the company’s Annual Report on Form 10-K for the year ended December 31, 2012. | |
It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the company’s financial position and operating results. Net sales and net earnings for any interim period are not necessarily indicative of future or annual results. | |
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 condensed consolidated financial statements as of and for the nine months ended September 30, 2013. Net sales related to these operations for the three and nine months ended September 30, 2013 totaled approximately $192 million and $635 million, respectively. At September 30, 2013, the assets and liabilities consisted primarily of inventories of $84 million, trade accounts receivable of $214 million, other assets of $100 million, and accounts payable and other accrued liabilities of $232 million. The majority of these operations are expected to be transferred to AbbVie by the end of 2014. | |
Prior to the separation on January 1, 2013, the historical financial statements of AbbVie were prepared on a stand-alone basis and were derived from Abbott’s consolidated financial statements and accounting records as if the former research-based pharmaceutical business of Abbott had been part of AbbVie for all periods presented. Accordingly, AbbVie’s financial statements for periods prior to January 1, 2013 are presented on a combined basis and reflect AbbVie’s financial position, results of operations and cash flows as its business was operated as part of Abbott prior to the separation, in conformity with U.S. GAAP. The historical combined financial statements also reflect an allocation of expenses related to certain Abbott corporate functions, including senior management, legal, human resources, finance, information technology and quality assurance. These expenses were allocated to AbbVie based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. AbbVie considers the expense allocation methodology and results to be reasonable. However, the allocations may not be indicative of the actual expenses that would have been incurred had AbbVie operated as an independent, publicly-traded company for the periods presented. These allocations totaled $197 million and $599 million for the three and nine months ended September 30, 2012. |
Supplemental_Financial_Informa
Supplemental Financial Information | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Supplemental Financial Information | ' | |||||||||
Supplemental Financial Information | ' | |||||||||
Note 2 | ||||||||||
Supplemental Financial Information | ||||||||||
Inventories | ||||||||||
September 30, | December 31, | |||||||||
(in millions) | 2013 | 2012 | ||||||||
Finished goods | $478 | $547 | ||||||||
Work-in-process | 439 | 286 | ||||||||
Raw materials | 255 | 258 | ||||||||
Inventories, net | $1,172 | $1,091 | ||||||||
Property and Equipment, Net | ||||||||||
September 30, | December 31, | |||||||||
(in millions) | 2013 | 2012 | ||||||||
Property and equipment, gross | $6,790 | $6,542 | ||||||||
Less accumulated depreciation | -4,546 | -4,295 | ||||||||
Property and equipment, net | $2,244 | $2,247 | ||||||||
Depreciation expense was $97 million and $93 million for the three months ended September 30, 2013 and 2012, respectively, and $289 million and $352 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||
Interest Expense (Income), Net | ||||||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||
Interest expense | $75 | $10 | $225 | $10 | ||||||
Interest income | -6 | -11 | -15 | -14 | ||||||
Interest expense (income), net | $69 | ($1) | $210 | ($4) |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2013 | |
Earnings Per Share | ' |
Earnings Per Share | ' |
Note 3 | |
Earnings Per Share | |
AbbVie calculates basic earnings per share (EPS) pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. AbbVie’s restricted stock units (RSUs) and restricted stock awards (RSAs) participate in dividends on the same basis as common shares and such dividends are nonforfeitable to the holder once declared. As a result, these RSUs and RSAs meet the definition of a participating security. | |
The dilutive effect of participating securities is calculated using the more dilutive of the treasury stock or the two-class method. For the three and nine months ended September 30, 2013, the two-class method was more dilutive. As such, the dilutive effect of outstanding RSUs and RSAs of approximately 5 million for both the three and nine months ended September 30, 2013 was excluded from the denominator for the calculation of diluted EPS. Additionally, all earnings (distributed and undistributed) allocable to participating securities was excluded from the numerator for the calculation of basic and diluted earnings per share. Earnings allocable to participating securities for the three and nine months ended September 30, 2013 were $6 million and $17 million, respectively. | |
For the three and nine months ended September 30, 2013, approximately 1 million of common shares issuable under stock-based compensation plans were excluded from the computation of earnings per common share assuming dilution because the effect would have been antidilutive. |
Acquisitions_Collaborations_an
Acquisitions, Collaborations and Other Arrangements | 9 Months Ended |
Sep. 30, 2013 | |
Acquisitions, Collaborations and Other Arrangements | ' |
Acquisitions, Collaborations and Other Arrangements | ' |
Note 4 | |
Acquisitions, Collaborations and Other Arrangements | |
In the first nine months of 2013 and 2012, cash outflows related to collaborations, the acquisition of product rights and other arrangements totaled $358 million and $780 million, respectively. The company recorded acquired in-process research and development (IPR&D) charges of $220 million and $290 million for the three and nine months ended September 30, 2013, respectively. IPR&D charges totaled $260 million for the nine months ended September 30, 2012 and were recorded during the first half of 2012. Significant arrangements impacting the first nine months of 2013 and 2012 included the following. | |
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, to treat inflammatory diseases including rheumatoid arthritis and systemic lupus erythematosus, resulting in a charge to IPR&D of $175 million. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $665 million, as well as royalties on net sales. | |
Galapagos NV | |
In September 2013, AbbVie recorded a charge to IPR&D of $45 million as a result of entering into a global collaboration with Galapagos NV (Galapagos) to discover, develop and commercialize cystic fibrosis therapies. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $360 million, as well as royalties on net sales. | |
In February 2012, AbbVie recorded a charge to IPR&D of $150 million as a result of entering into a global collaboration with Galapagos to develop and commercialize a next-generation, oral Janus Kinase 1 (JAK1) inhibitor in Phase II development with the potential to treat multiple autoimmune diseases. Additional payments of approximately $1.3 billion could be required for the achievement of certain development, regulatory and commercial milestones under this agreement. | |
Alvine Pharmaceuticals, Inc. | |
In May 2013, AbbVie entered into a global collaboration with Alvine Pharmaceuticals, Inc. (Alvine) to develop ALV003, a novel oral treatment for patients with celiac disease. As part of the agreement, AbbVie made an initial upfront payment of $70 million, which was expensed to IPR&D in the second quarter of 2013. AbbVie could make additional payments totaling up to $275 million pursuant to this arrangement. | |
Action Pharma A/S | |
In May 2012, AbbVie recorded a charge to IPR&D of $110 million as a result of the acquisition of ABT-719 (previously referred to as AP214), a drug under development for the prevention of acute kidney injury associated with major cardiac surgery in patients at increased risk. | |
Reata Pharmaceuticals, Inc. | |
In the fourth quarter of 2011, AbbVie entered into a collaboration with Reata Pharmaceuticals (Reata) for the joint development and commercialization of second-generation oral antioxidant inflammation modulators resulting in a charge to IPR&D of $400 million, which was paid in the first quarter of 2012. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||
Note 5 | ||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||
Goodwill | ||||||||||||||
The following table summarizes changes in the carrying amount of AbbVie’s goodwill. | ||||||||||||||
(in millions) | ||||||||||||||
Balance at December 31, 2012 | $6,130 | |||||||||||||
Additions | 25 | |||||||||||||
Currency translation and other adjustments | 44 | |||||||||||||
Balance at September 30, 2013 | $6,199 | |||||||||||||
Goodwill additions for the nine months ended September 30, 2013, related to product rights acquired during the second quarter. The latest impairment assessment of goodwill was completed in the third quarter of 2013. As of September 30, 2013, 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. | ||||||||||||||
Other Intangible Assets, Net | ||||||||||||||
The following table summarizes AbbVie’s intangible assets. | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Gross | Net | Gross | Net | |||||||||||
carrying | Accumulated | carrying | carrying | Accumulated | carrying | |||||||||
(in millions) | amount | amortization | amount | amount | amortization | amount | ||||||||
Definite-lived intangible assets | ||||||||||||||
Developed product rights | $4,737 | ($3,416) | $1,321 | $4,699 | ($3,031) | $1,668 | ||||||||
License agreements | 997 | -771 | 226 | 969 | -734 | 235 | ||||||||
Total definite-lived intangible assets | 5,734 | -4,187 | 1,547 | 5,668 | -3,765 | 1,903 | ||||||||
Indefinite-lived research and development | 446 | — | 446 | 420 | — | 420 | ||||||||
Total intangible assets | $6,180 | ($4,187) | $1,993 | $6,088 | ($3,765) | $2,323 | ||||||||
Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. Amortization expense was $137 million and $134 million for the three months ended September 30, 2013 and 2012, respectively, and $408 million and $489 million for the nine months ended September 30, 2013 and 2012, respectively. Additions related to the acquisition of amortizable intangible assets in the second quarter of 2013 with an average amortization period of 5 years. | ||||||||||||||
The indefinite-lived intangible assets as of December 31, 2012 relate to IPR&D acquired in a business combination. Additions related to the acquisition of IPR&D in the second quarter of 2013. The latest impairment assessment of intangible assets not subject to amortization was completed in the third quarter of 2013. There were no impairment charges recorded in the nine months ended September 30, 2013 and 2012. 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 | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Restructuring Plans | ' | |||
Restructuring Plans | ' | |||
Note 6 | ||||
Restructuring Plans | ||||
In 2013 and prior years, AbbVie management approved plans to realign its worldwide manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs. In the second quarter of 2013, the company approved plans to restructure certain commercial operations in conjunction with the loss and expected loss of exclusivity of certain products. | ||||
Restructuring charges were $11 million and $75 million for the three and nine months ended September 30, 2013, respectively, and were primarily recorded within SG&A in the condensed consolidated statements of earnings, with the remainder recorded within research and development and cost of products sold. Included in the charges were cash costs of $8 million and $68 million for the three and nine months ended September 30, 2013, respectively, which mainly related to employee severance and contractual obligations. | ||||
For the three and nine months ended September 30, 2012, AbbVie incurred restructuring charges of $176 million and $206 million, respectively. The charge recorded in the third quarter of 2012 included cash costs of approximately $150 million for employee severance and contractual obligations, primarily related to the exit from a research and development facility, of which approximately $142 million was recorded within research and development and approximately $8 million within SG&A in the condensed consolidated statements of earnings. The charge for the nine months ended September 30, 2012 also included $56 million of additional charges, primarily for accelerated depreciation, asset impairments and product transfer costs, of which $26 million was recorded in the third quarter of 2012. | ||||
The following summarizes the cash activity in the restructuring reserves for the nine months ended September 30, 2013. | ||||
(in millions) | ||||
Accrued balance at December 31, 2012 | $193 | |||
2013 restructuring charges | 68 | |||
Payments and other adjustments | -83 | |||
Accrued balance at September 30, 2013 | $178 | |||
Included in payments and other adjustments for the nine months ended September 30, 2013 was a $23 million reversal in the first quarter of a previously recorded restructuring reserve due to the company’s re-evaluation of a prior year decision to exit a manufacturing facility. |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measures | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Financial Instruments and Fair Value Measures | ' | |||||||||||
Financial Instruments and Fair Value Measures | ' | |||||||||||
Note 7 | ||||||||||||
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 $1.7 billion and $1.0 billion at September 30, 2013 and December 31, 2012, respectively, are designated as cash flow hedges and are recorded at fair value. Accumulated gains and losses as of September 30, 2013 will be included in cost of products sold at the time the products are sold, generally through the next twelve months. | ||||||||||||
The company enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. The contracts are marked-to-market, and resulting gains or losses are reflected in income and are generally offset by losses or gains on the foreign currency exposure being managed. At September 30, 2013 and December 31, 2012, AbbVie held notional amounts of $4.2 billion and $4.3 billion, respectively, of such foreign currency forward exchange contracts. | ||||||||||||
AbbVie was a party to interest rate hedge contracts, designated as fair value hedges, totaling $8.0 billion at both September 30, 2013 and December 31, 2012. The effect of the hedge is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie recorded the contracts at fair value and adjusted the carrying amount of the fixed-rate debt by an offsetting amount. | ||||||||||||
The following table summarizes the amounts and location of AbbVie’s derivative instruments as of September 30, 2013. | ||||||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||||
(in millions) | Fair value | Balance sheet caption | Fair value | Balance sheet caption | ||||||||
Interest rate swaps designated as fair value hedges | $— | n/a | $349 | Long-term liabilities | ||||||||
Foreign currency forward exchange contracts — | ||||||||||||
Hedging instruments | — | Prepaid expenses and other | 57 | Accounts payable and accrued liabilities | ||||||||
Others not designated as hedges | 25 | Prepaid expenses and other | 26 | Accounts payable and accrued liabilities | ||||||||
Total | $25 | $432 | ||||||||||
The following table summarizes the amounts and location of AbbVie’s derivative instruments as of December 31, 2012. | ||||||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||||
(in millions) | Fair value | Balance sheet caption | Fair value | Balance sheet caption | ||||||||
Interest rate swaps designated as fair value hedges | $— | n/a | $81 | Long-term liabilities | ||||||||
Foreign currency forward exchange contracts — | ||||||||||||
Hedging instruments | 1 | Prepaid expenses and other | 10 | Accounts payable and accrued liabilities | ||||||||
Others not designated as hedges | 14 | Prepaid expenses and other | 15 | Accounts payable and accrued liabilities | ||||||||
Total | $15 | $106 | ||||||||||
While certain derivatives are subject to netting arrangements with the company’s counterparties, the company does not offset derivative assets and liabilities within the condensed consolidated balance sheets. | ||||||||||||
The following table summarizes the activity for derivative instruments and the amounts and location of income (expense) and gain (loss) reclassified into income and for certain other derivative instruments for the three months ended September 30, 2013 and 2012, respectively. The amount of hedge ineffectiveness was not significant for the three months ended September 30, 2013 or 2012. | ||||||||||||
(Loss) gain | Income (expense) | |||||||||||
recognized in other | and gain (loss) | |||||||||||
comprehensive | reclassified into | |||||||||||
(loss) income | income | |||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | Income statement caption | |||||||
Foreign currency forward exchange contracts — | ||||||||||||
Designated as cash flow hedges | ($62) | ($1) | ($2) | $7 | Cost of products sold | |||||||
Not designated as hedges | n/a | n/a | 9 | 4 | Net foreign exchange loss | |||||||
Interest rate swaps designated as fair value hedges | n/a | n/a | 47 | n/a | Interest expense, net | |||||||
The gain of $47 million related to fair value hedges recognized in net interest expense for the three months ended September 30, 2013 was offset by $47 million in losses on the underlying hedged item, the fixed-rate debt. | ||||||||||||
The following table summarizes the activity for derivative instruments and the amounts and location of income (expense) and gain (loss) reclassified into income and for certain other derivative instruments for the nine months ended September 30, 2013 and 2012, respectively. The amount of hedge ineffectiveness was not significant for the nine months ended September 30, 2013 or 2012. | ||||||||||||
(Loss) gain | Income (expense) | |||||||||||
recognized in other | and gain (loss) | |||||||||||
comprehensive | reclassified into | |||||||||||
(loss) income | income | |||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | Income statement caption | |||||||
Foreign currency forward exchange contracts — | ||||||||||||
Designated as cash flow hedges | ($53) | ($3) | ($4) | $16 | Cost of products sold | |||||||
Not designated as hedges | n/a | n/a | 49 | -17 | Net foreign exchange loss | |||||||
Interest rate swaps designated as fair value hedges | n/a | n/a | -268 | n/a | Interest expense, net | |||||||
The loss of $268 million related to fair value hedges recognized in net interest expense for the first nine months of 2013 was offset by $268 million in gains on the underlying hedged item, the fixed-rate debt. | ||||||||||||
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 condensed consolidated balance sheets as of September 30, 2013. | ||||||||||||
Basis of fair value measurement | ||||||||||||
Quoted prices in | ||||||||||||
active markets for | Significant other | Significant | ||||||||||
Balance at | identical | observable inputs | unobservable | |||||||||
(in millions) | September 30, 2013 | assets (Level 1) | (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Cash and equivalents | $8,975 | $533 | $8,442 | $— | ||||||||
Certificates of deposit | 621 | — | 621 | — | ||||||||
Equity securities | 9 | 9 | — | — | ||||||||
Foreign currency contracts | 25 | — | 25 | — | ||||||||
Total assets | $9,630 | $542 | $9,088 | $— | ||||||||
Liabilities | ||||||||||||
Interest rate hedges | $349 | $— | $349 | $— | ||||||||
Foreign currency contracts | 83 | — | 83 | — | ||||||||
Contingent consideration | 160 | — | — | 160 | ||||||||
Total liabilities | $592 | $— | $432 | $160 | ||||||||
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 combined balance sheet as of December 31, 2012. | ||||||||||||
Basis of fair value measurement | ||||||||||||
Quoted prices in | ||||||||||||
active markets for | Significant other | Significant | ||||||||||
Balance at | identical | observable inputs | unobservable | |||||||||
(in millions) | December 31, 2012 | assets (Level 1) | (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Cash and equivalents | $5,901 | $675 | $5,226 | $— | ||||||||
Certificates of deposit | 1,775 | — | 1,775 | — | ||||||||
U.S. Treasury securities | 300 | 300 | — | — | ||||||||
Equity securities | 12 | 12 | — | — | ||||||||
Foreign currency contracts | 15 | — | 15 | — | ||||||||
Total assets | $8,003 | $987 | $7,016 | $— | ||||||||
Liabilities | ||||||||||||
Interest rate hedges | $81 | $— | $81 | $— | ||||||||
Foreign currency contracts | 25 | — | 25 | — | ||||||||
Contingent consideration | 251 | — | — | 251 | ||||||||
Total liabilities | $357 | $— | $106 | $251 | ||||||||
Available-for-sale equity securities consist of investments for which the fair value is determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company are valued using publicized spot and forward prices for foreign currency hedges and publicized swap curves for interest rate hedges. The contingent payments are valued using a discounted cash flow technique that reflects management’s expectations about probability and timing of payment. | ||||||||||||
Gross unrealized holding gains on available-for-sale equity securities totaled $2 million and $1 million at September 30, 2013 and December 31, 2012, respectively. | ||||||||||||
There have been no transfers of assets or liabilities between the fair value measurement levels. The following table is a reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and investments. | ||||||||||||
(in millions) | ||||||||||||
Fair value as of December 31, 2012 | $251 | |||||||||||
Payments | -131 | |||||||||||
Additions | 28 | |||||||||||
Other | — | |||||||||||
Loss recognized in earnings | 12 | |||||||||||
Fair value as of September 30, 2013 | $160 | |||||||||||
In connection with the acquisition of Solvay’s U.S. pharmaceuticals business in 2010, the achievement of a certain sales milestone resulted in a payment of approximately $131 million in the first quarter of 2013 for which a liability was previously established. Additions of $28 million related to the acquisition of product rights during the second quarter. | ||||||||||||
In addition to the financial instruments that the company is required to recognize at fair value on the condensed consolidated balance sheets, the company has certain financial instruments that are recognized at historical cost or some basis other than fair value. The carrying values and fair values of certain financial instruments as of September 30, 2013 and December 31, 2012 are shown in the table below. | ||||||||||||
Book values | Approximate fair values | |||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||
Assets | ||||||||||||
Investments | $114 | $107 | $125 | $104 | ||||||||
Liabilities | ||||||||||||
Short-term borrowings | 411 | 1,020 | 411 | 1,020 | ||||||||
Current maturities of long-term debt and lease obligations | 23 | 22 | 23 | 22 | ||||||||
Long-term debt | 14,375 | 14,630 | 14,224 | 15,066 | ||||||||
The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of September 30, 2013. | ||||||||||||
Basis of fair value measurement | ||||||||||||
Quoted prices in active | Significant | Significant | ||||||||||
Fair value at | markets for identical | other observable | unobservable | |||||||||
(in millions) | September 30, 2013 | assets (Level 1) | inputs (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Investments | $125 | $— | $32 | $93 | ||||||||
Total assets | $125 | $— | $32 | $93 | ||||||||
Liabilities | ||||||||||||
Short-term borrowings | $411 | $— | $411 | $— | ||||||||
Current maturities of long-term debt and lease obligations | 23 | — | 23 | — | ||||||||
Long-term debt and lease obligations | 14,224 | — | 14,224 | — | ||||||||
Total liabilities | $14,658 | $— | $14,658 | $— | ||||||||
The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of December 31, 2012. | ||||||||||||
Basis of fair value measurement | ||||||||||||
Fair value at | Quoted prices in active | Significant | Significant | |||||||||
December 31, | markets for identical | other observable | unobservable | |||||||||
(in millions) | 2012 | assets (Level 1) | inputs (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Investments | $104 | $— | $32 | $72 | ||||||||
Total assets | $104 | $— | $32 | $72 | ||||||||
Liabilities | ||||||||||||
Short-term borrowings | $1,020 | $— | $1,020 | $— | ||||||||
Current maturities of long-term debt and lease obligations | 22 | — | 22 | — | ||||||||
Long-term debt and lease obligations | 15,066 | — | 15,066 | — | ||||||||
Total liabilities | $16,108 | $— | $16,108 | $— | ||||||||
Investments consist of cost method investments and held-to-maturity debt securities. In determining the fair value of 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 and long-term debt 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 counterparties to financial instruments consist of select major international financial institutions. | ||||||||||||
Concentrations of Risk | ||||||||||||
The company invests excess cash in time deposits, money market funds and U.S. Treasury securities and diversifies the concentration of cash among different financial institutions. The company monitors concentrations of credit risk associated with deposits with financial institutions. Credit exposure limits have been established to limit a concentration with any single issuer or institution. | ||||||||||||
Three U.S. wholesalers accounted for 39 percent and 48 percent of total net accounts receivables as of September 30, 2013 and December 31, 2012, respectively, and substantially all of AbbVie’s U.S. sales are to these three wholesalers. In addition, net governmental receivables outstanding in Greece, Portugal, Italy and Spain totaled $804 million at September 30, 2013 and $725 million at December 31, 2012. | ||||||||||||
Short-Term Borrowings | ||||||||||||
During the nine months ended September 30, 2013, the company issued and redeemed commercial paper, of which $400 million was outstanding as of September 30, 2013, with a weighted-average interest rate of 0.3 percent for the nine months ended September 30, 2013. There were no borrowings outstanding under the company’s credit facility as of September 30, 2013. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||
Note 8 | ||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||
The following table summarizes the changes in balances of each component of accumulated other comprehensive loss, net of tax as of September 30, 2013. | ||||||||||||
Foreign | Pension and | Unrealized | ||||||||||
currency | post- | gains (losses) on | Gains (losses) | |||||||||
translation | employment | marketable | on hedging | |||||||||
(in millions) (brackets denote losses) | adjustments | benefits | equity securities | activities | Total | |||||||
Balance as of December 31, 2012 | $181 | ($511) | $1 | ($21) | ($350) | |||||||
Other comprehensive income before reclassifications | 23 | 20 | — | -53 | ($10) | |||||||
Amounts reclassified from accumulated other comprehensive income | — | 57 | — | 4 | $61 | |||||||
Net current-period other comprehensive income | 23 | 77 | — | -49 | $51 | |||||||
Separation-related adjustments | 241 | -934 | — | 11 | ($682) | |||||||
Balance as of September 30, 2013 | $445 | ($1,368) | $1 | ($59) | ($981) | |||||||
The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the three and nine months ended September 30, 2013. | ||||||||||||
Three months ended | Nine months ended | |||||||||||
Type of reclassification (in millions) | September 30, 2013 | September 30, 2013 | ||||||||||
Pension and post-employee benefits | ||||||||||||
Amortization of actuarial losses and other | $30 | $83 | ||||||||||
Less tax expense | -8 | -26 | ||||||||||
Total reclassification, net of tax | $22 | $57 |
PostEmployment_Benefits
Post-Employment Benefits | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Post-Employment Benefits | ' | |||||||||
Post-Employment Benefits | ' | |||||||||
Note 9 | ||||||||||
Post-Employment Benefits | ||||||||||
Prior to separation, AbbVie employees participated in certain U.S. and international defined benefit pension and other post-employment (OPEB) plans sponsored by Abbott. These plans included participants of Abbott’s other businesses and were accounted for as multi-employer plans in AbbVie’s combined financial statements. As a result, no asset or liability was recorded by AbbVie in the historical balance sheets through December 31, 2012 to recognize the funded status of these plans. In connection with the separation of AbbVie from Abbott on January 1, 2013, these plans were separated. As a result, AbbVie assumed obligations previously provided by Abbott and a portion of certain plans owned by AbbVie at December 31, 2012 were transferred to Abbott. | ||||||||||
The amounts shown in the table below reflect the amount of AbbVie’s assumption of the net obligations for pension and other post-employment benefits. | ||||||||||
Other | ||||||||||
Defined | post-employment | |||||||||
(in millions) | benefit plans | plans | ||||||||
Accumulated benefit obligation | $2,423 | $192 | ||||||||
Deferred losses | -1,434 | -2 | ||||||||
Projected benefit obligations | 2,910 | 192 | ||||||||
Fair value of assets | 2,216 | — | ||||||||
Net liability | $694 | $192 | ||||||||
The net liabilities assumed increased $72 million for defined benefit plans and decreased $78 million for OPEB plans during the third quarter of 2013 as a result of the finalization of the legal split of these plans. | ||||||||||
Net Periodic Benefit Cost | ||||||||||
The following is a summary of net periodic benefit cost relating to the company’s pension and other post-employment benefit (OPEB) plans. | ||||||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
Defined benefit plans | 2013 | 2012 | 2013 | 2012 | ||||||
Service cost | $39 | $5 | $133 | $13 | ||||||
Interest cost | 46 | 8 | 142 | 25 | ||||||
Expected return on plan assets | -63 | -7 | -195 | -17 | ||||||
Amortization of actuarial losses and prior service costs | 30 | 2 | 83 | 3 | ||||||
Net periodic pension benefit cost | $52 | $8 | $163 | $24 | ||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
Other post-employment plans | 2013 | 2012 | 2013 | 2012 | ||||||
Service cost | $5 | $— | $17 | $— | ||||||
Interest cost | 2 | — | 14 | — | ||||||
Expected return on plan assets | — | — | — | — | ||||||
Amortization of actuarial losses and prior service costs | — | — | — | — | ||||||
Net periodic pension benefit cost | $7 | $— | $31 | $— | ||||||
In the first quarter of 2013, AbbVie made a voluntary contribution of $145 million to its main domestic defined benefit pension plan. |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Stock-Based Compensation | ' | |||||||||
Stock-Based Compensation | ' | |||||||||
Note 10 | ||||||||||
Stock-Based Compensation | ||||||||||
Stock-based compensation expense was $41 million and $30 million for the three months ended September 30, 2013 and 2012, respectively, and $175 million and $156 million for the nine months ended September 30, 2013 and 2012, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2012 was allocated to AbbVie based on the portion of Abbott’s incentive stock program in which AbbVie employees participated. | ||||||||||
Prior to separation, AbbVie employees participated in Abbott’s incentive stock program. Adopted after the separation, the AbbVie Incentive Stock Program provides for the assumption of certain awards granted under Abbott’s incentive stock program and authorizes the grant of several different forms of benefits, including nonqualified stock options, RSAs, and RSUs. | ||||||||||
In connection with the separation, employee stock options, RSAs and RSUs were adjusted and converted into new equity 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. Converted awards retained the vesting schedule and expiration date of the original awards. | ||||||||||
Stock Options | ||||||||||
The expense related to stock options granted during the nine months ended September 30, 2013 was primarily based on the assumptions shown in the table below. There were no significant stock options granted in the three months ended September 30, 2013. | ||||||||||
Risk-free interest rate | 1.10% | |||||||||
Average life of options (years) | 6 | |||||||||
Volatility | 32.63% | |||||||||
Dividend yield | 4.30% | |||||||||
Fair value per stock option | $6.87 | |||||||||
The following table summarizes AbbVie stock option activity for both AbbVie and Abbott employees for the nine months ended September 30, 2013. | ||||||||||
Weighted- | ||||||||||
Weighted- | average | |||||||||
average | remaining life (in | Aggregate | ||||||||
(options in thousands, aggregate intrinsic value in millions) | Options | exercise price | years) | intrinsic value | ||||||
Outstanding at December 31, 2012 | — | $— | ||||||||
Options converted on January 1, 2013 | 47,718 | 27 | ||||||||
Granted | 3,128 | 37.91 | ||||||||
Exercised | -11,041 | 27.47 | ||||||||
Lapsed | -221 | 27.71 | ||||||||
Outstanding at September 30, 2013 | 39,584 | $27.73 | 3.7 | $677 | ||||||
Exercisable at September 30, 2013 | 36,007 | $27.28 | 3.3 | $632 | ||||||
The aggregate intrinsic value in the table above represents the difference between the exercise price and the company’s closing stock price on the last day of trading for the period ended September 30, 2013. The total intrinsic value of options exercised in the three and nine months ended September 30, 2013 was $41 million and $157 million, respectively. | ||||||||||
As of September 30, 2013, $3 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years. | ||||||||||
RSAs & RSUs | ||||||||||
The following table summarizes AbbVie RSA and RSU balances for both AbbVie and Abbott employees for the nine months ended September 30, 2013. | ||||||||||
Weighted-average | ||||||||||
(share units in thousands) | Share units | grant date fair value | ||||||||
Outstanding at December 31, 2012 | — | $— | ||||||||
Awards converted on January 1, 2013 | 15,394 | 27.55 | ||||||||
Granted | 7,387 | 36.18 | ||||||||
Vested | -7,483 | 27.3 | ||||||||
Lapsed | -423 | 30.39 | ||||||||
Outstanding at September 30, 2013 | 14,875 | $31.89 | ||||||||
Unvested shares at September 30, 2013 | 14,719 | $31.90 | ||||||||
The fair value of restricted stock awards and units is determined based on the quoted price of the company’s common stock on the date of the grant. The fair market value of restricted stock awards and units vested in the three and nine months ended September 30, 2013 was $5 million and $282 million, respectively. As of September 30, 2013, $198 million of unrecognized compensation cost related to RSAs and RSUs is expected to be recognized as expense over approximately the next two years. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
Note 11 | |
Income Taxes | |
In AbbVie’s historical financial statements prior to the separation, income tax expense and deferred tax balances were calculated on a separate tax return basis although AbbVie’s operations had historically been included in the tax returns filed by the respective Abbott entities of which the AbbVie business was a part. Subsequent to the separation, AbbVie files tax returns on its own behalf and its income tax expense and deferred income tax balances have been recorded in accordance with AbbVie’s stand-alone income tax positions. AbbVie and Abbott entered into a tax sharing agreement effective on the date of separation. For tax contingencies prior to the separation, Abbott will indemnify and hold AbbVie harmless if the tax positions are settled for amounts in excess of recorded liabilities, and AbbVie will not benefit if prior tax positions are resolved more favorably than recorded amounts. | |
The effective income tax rate was 25.0 percent and 22.9 percent for the three and nine months ended September 30, 2013 and 1.2 percent and 7.0 percent for the three and nine months ended September 30, 2012, respectively. The effective tax rates in each period were less than the statutory federal income tax rate of 35 percent principally due to the benefit of lower statutory tax rates and tax exemptions in certain foreign jurisdictions. The increase in the effective tax rates for the three and nine months ended September 30, 2013 over the prior year periods was principally due to income tax expense relating to certain 2013 earnings outside the United States that are not deemed indefinitely reinvested, as well as the impact of $190 million of tax benefits recognized in the third quarter of 2012 as a result of the favorable resolution of various tax positions pertaining to a prior year. AbbVie will continue to evaluate whether to indefinitely reinvest certain future earnings in foreign jurisdictions as it analyzes its future global liquidity and financial structure. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2013 | |
Litigation | ' |
Litigation | ' |
Note 12 | |
Litigation | |
AbbVie is involved in various claims, legal proceedings and investigations. The recorded accrual balance for litigation at September 30, 2013 was not significant. Within the next year, other legal proceedings may occur that may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all other proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, cash flows, or results of operations. | |
The U.S. Department of Justice, through the U.S. Attorney for the Western District of Virginia, and various state Attorneys General investigated AbbVie’s sales and marketing activities for Depakote. The government sought to determine whether any of these activities violated civil and/or criminal laws, including the Federal False Claims Act, the Food, Drug and Cosmetic Act, and the Anti-Kickback Statute in connection with Medicare and/or Medicaid reimbursement to third parties. The state Attorneys General offices sought to determine whether any of these activities violated various state laws, including state consumer fraud/protection statutes. AbbVie recorded charges of $1.5 billion in the third quarter of 2011 and $100 million in the first quarter of 2012 related to civil and criminal claims arising from this matter. In May 2012, AbbVie reached resolution of all Depakote-related federal claims, Medicaid-related claims with 49 states and the District of Columbia, and consumer protection claims with 45 states and the District of Columbia. In 2012, AbbVie paid approximately $1.6 billion for the settlement. The payments were material to AbbVie’s cash flows in 2012. |
Segment_Information
Segment Information | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Segment Information | ' | |||||||||
Segment Information | ' | |||||||||
Note 13 | ||||||||||
Segment Information | ||||||||||
AbbVie operates in one business segment—pharmaceutical products. Substantially all of AbbVie’s U.S. sales are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served. Worldwide net sales of key products were as follows. | ||||||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||
HUMIRA | $2,770 | $2,326 | $7,620 | $6,585 | ||||||
AndroGel | 248 | 279 | 746 | 787 | ||||||
Kaletra | 237 | 267 | 734 | 763 | ||||||
Niaspan | 201 | 232 | 619 | 634 | ||||||
Lupron | 196 | 189 | 576 | 589 | ||||||
Synthroid | 161 | 131 | 433 | 383 | ||||||
Sevoflurane | 138 | 135 | 412 | 444 | ||||||
Creon | 101 | 92 | 297 | 248 | ||||||
Zemplar | 100 | 91 | 288 | 276 | ||||||
Synagis | 98 | 96 | 513 | 506 | ||||||
Duodopa | 46 | 37 | 129 | 108 | ||||||
TriCor/TRILIPIX | 39 | 332 | 274 | 897 | ||||||
All other | 323 | 301 | 1,038 | 954 | ||||||
Net sales | $4,658 | $4,508 | $13,679 | $13,174 |
Supplemental_Financial_Informa1
Supplemental Financial Information (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Supplemental Financial Information | ' | |||||||||
Schedule of inventories, net | ' | |||||||||
September 30, | December 31, | |||||||||
(in millions) | 2013 | 2012 | ||||||||
Finished goods | $478 | $547 | ||||||||
Work-in-process | 439 | 286 | ||||||||
Raw materials | 255 | 258 | ||||||||
Inventories, net | $1,172 | $1,091 | ||||||||
Schedule of property and equipment, net | ' | |||||||||
September 30, | December 31, | |||||||||
(in millions) | 2013 | 2012 | ||||||||
Property and equipment, gross | $6,790 | $6,542 | ||||||||
Less accumulated depreciation | -4,546 | -4,295 | ||||||||
Property and equipment, net | $2,244 | $2,247 | ||||||||
Schedule of interest expense (income), net | ' | |||||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||
Interest expense | $75 | $10 | $225 | $10 | ||||||
Interest income | -6 | -11 | -15 | -14 | ||||||
Interest expense (income), net | $69 | ($1) | $210 | ($4) |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||
Summary of changes in the carrying amount of the entity's goodwill | ' | |||||||||||||
(in millions) | ||||||||||||||
Balance at December 31, 2012 | $6,130 | |||||||||||||
Additions | 25 | |||||||||||||
Currency translation and other adjustments | 44 | |||||||||||||
Balance at September 30, 2013 | $6,199 | |||||||||||||
Schedule of intangible assets | ' | |||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Gross | Net | Gross | Net | |||||||||||
carrying | Accumulated | carrying | carrying | Accumulated | carrying | |||||||||
(in millions) | amount | amortization | amount | amount | amortization | amount | ||||||||
Definite-lived intangible assets | ||||||||||||||
Developed product rights | $4,737 | ($3,416) | $1,321 | $4,699 | ($3,031) | $1,668 | ||||||||
License agreements | 997 | -771 | 226 | 969 | -734 | 235 | ||||||||
Total definite-lived intangible assets | 5,734 | -4,187 | 1,547 | 5,668 | -3,765 | 1,903 | ||||||||
Indefinite-lived research and development | 446 | — | 446 | 420 | — | 420 | ||||||||
Total intangible assets | $6,180 | ($4,187) | $1,993 | $6,088 | ($3,765) | $2,323 |
Restructuring_Plans_Tables
Restructuring Plans (Tables) (Restructuring Plan 2013 and Prior Years) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Restructuring Plan 2013 and Prior Years | ' | |||
Restructuring Plans | ' | |||
Summary of cash activity in the restructuring reserves | ' | |||
(in millions) | ||||
Accrued balance at December 31, 2012 | $193 | |||
2013 restructuring charges | 68 | |||
Payments and other adjustments | -83 | |||
Accrued balance at September 30, 2013 | $178 |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measures (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Financial Instruments and Fair Value Measures | ' | |||||||||||
Schedule of amounts and balance sheet location of derivatives | ' | |||||||||||
The following table summarizes the amounts and location of AbbVie’s derivative instruments as of September 30, 2013. | ||||||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||||
(in millions) | Fair value | Balance sheet caption | Fair value | Balance sheet caption | ||||||||
Interest rate swaps designated as fair value hedges | $— | n/a | $349 | Long-term liabilities | ||||||||
Foreign currency forward exchange contracts — | ||||||||||||
Hedging instruments | — | Prepaid expenses and other | 57 | Accounts payable and accrued liabilities | ||||||||
Others not designated as hedges | 25 | Prepaid expenses and other | 26 | Accounts payable and accrued liabilities | ||||||||
Total | $25 | $432 | ||||||||||
The following table summarizes the amounts and location of AbbVie’s derivative instruments as of December 31, 2012. | ||||||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||||
(in millions) | Fair value | Balance sheet caption | Fair value | Balance sheet caption | ||||||||
Interest rate swaps designated as fair value hedges | $— | n/a | $81 | Long-term liabilities | ||||||||
Foreign currency forward exchange contracts — | ||||||||||||
Hedging instruments | 1 | Prepaid expenses and other | 10 | Accounts payable and accrued liabilities | ||||||||
Others not designated as hedges | 14 | Prepaid expenses and other | 15 | Accounts payable and accrued liabilities | ||||||||
Total | $15 | $106 | ||||||||||
Schedule of derivative activity and amounts and locations of income (expense) and gain (loss) reclassified into income | ' | |||||||||||
The amount of hedge ineffectiveness was not significant for the three months ended September 30, 2013 or 2012. | ||||||||||||
(Loss) gain | Income (expense) | |||||||||||
recognized in other | and gain (loss) | |||||||||||
comprehensive | reclassified into | |||||||||||
(loss) income | income | |||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | Income statement caption | |||||||
Foreign currency forward exchange contracts — | ||||||||||||
Designated as cash flow hedges | ($62) | ($1) | ($2) | $7 | Cost of products sold | |||||||
Not designated as hedges | n/a | n/a | 9 | 4 | Net foreign exchange loss | |||||||
Interest rate swaps designated as fair value hedges | n/a | n/a | 47 | n/a | Interest expense, net | |||||||
The amount of hedge ineffectiveness was not significant for the nine months ended September 30, 2013 or 2012. | ||||||||||||
(Loss) gain | Income (expense) | |||||||||||
recognized in other | and gain (loss) | |||||||||||
comprehensive | reclassified into | |||||||||||
(loss) income | income | |||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | Income statement caption | |||||||
Foreign currency forward exchange contracts — | ||||||||||||
Designated as cash flow hedges | ($53) | ($3) | ($4) | $16 | Cost of products sold | |||||||
Not designated as hedges | n/a | n/a | 49 | -17 | Net foreign exchange loss | |||||||
Interest rate swaps designated as fair value hedges | n/a | n/a | -268 | n/a | Interest expense, net | |||||||
Summary of the bases used to measure certain assets and liabilities that are carried at fair value on a recurring basis in the condensed consolidated balance sheets | ' | |||||||||||
Basis of fair value measurement | ||||||||||||
Quoted prices in | ||||||||||||
active markets for | Significant other | Significant | ||||||||||
Balance at | identical | observable inputs | unobservable | |||||||||
(in millions) | September 30, 2013 | assets (Level 1) | (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Cash and equivalents | $8,975 | $533 | $8,442 | $— | ||||||||
Certificates of deposit | 621 | — | 621 | — | ||||||||
Equity securities | 9 | 9 | — | — | ||||||||
Foreign currency contracts | 25 | — | 25 | — | ||||||||
Total assets | $9,630 | $542 | $9,088 | $— | ||||||||
Liabilities | ||||||||||||
Interest rate hedges | $349 | $— | $349 | $— | ||||||||
Foreign currency contracts | 83 | — | 83 | — | ||||||||
Contingent consideration | 160 | — | — | 160 | ||||||||
Total liabilities | $592 | $— | $432 | $160 | ||||||||
Basis of fair value measurement | ||||||||||||
Quoted prices in | ||||||||||||
active markets for | Significant other | Significant | ||||||||||
Balance at | identical | observable inputs | unobservable | |||||||||
(in millions) | December 31, 2012 | assets (Level 1) | (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Cash and equivalents | $5,901 | $675 | $5,226 | $— | ||||||||
Certificates of deposit | 1,775 | — | 1,775 | — | ||||||||
U.S. Treasury securities | 300 | 300 | — | — | ||||||||
Equity securities | 12 | 12 | — | — | ||||||||
Foreign currency contracts | 15 | — | 15 | — | ||||||||
Total assets | $8,003 | $987 | $7,016 | $— | ||||||||
Liabilities | ||||||||||||
Interest rate hedges | $81 | $— | $81 | $— | ||||||||
Foreign currency contracts | 25 | — | 25 | — | ||||||||
Contingent consideration | 251 | — | — | 251 | ||||||||
Total liabilities | $357 | $— | $106 | $251 | ||||||||
Schedule of reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and investments | ' | |||||||||||
(in millions) | ||||||||||||
Fair value as of December 31, 2012 | $251 | |||||||||||
Payments | -131 | |||||||||||
Additions | 28 | |||||||||||
Other | — | |||||||||||
Loss recognized in earnings | 12 | |||||||||||
Fair value as of September 30, 2013 | $160 | |||||||||||
Schedule of the carrying values and fair values of certain financial instruments | ' | |||||||||||
Book values | Approximate fair values | |||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||
Assets | ||||||||||||
Investments | $114 | $107 | $125 | $104 | ||||||||
Liabilities | ||||||||||||
Short-term borrowings | 411 | 1,020 | 411 | 1,020 | ||||||||
Current maturities of long-term debt and lease obligations | 23 | 22 | 23 | 22 | ||||||||
Long-term debt | 14,375 | 14,630 | 14,224 | 15,066 | ||||||||
Schedule of fair value of financial instruments by fair value basis | ' | |||||||||||
Basis of fair value measurement | ||||||||||||
Quoted prices in active | Significant | Significant | ||||||||||
Fair value at | markets for identical | other observable | unobservable | |||||||||
(in millions) | September 30, 2013 | assets (Level 1) | inputs (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Investments | $125 | $— | $32 | $93 | ||||||||
Total assets | $125 | $— | $32 | $93 | ||||||||
Liabilities | ||||||||||||
Short-term borrowings | $411 | $— | $411 | $— | ||||||||
Current maturities of long-term debt and lease obligations | 23 | — | 23 | — | ||||||||
Long-term debt and lease obligations | 14,224 | — | 14,224 | — | ||||||||
Total liabilities | $14,658 | $— | $14,658 | $— | ||||||||
Basis of fair value measurement | ||||||||||||
Fair value at | Quoted prices in active | Significant | Significant | |||||||||
December 31, | markets for identical | other observable | unobservable | |||||||||
(in millions) | 2012 | assets (Level 1) | inputs (Level 2) | inputs (Level 3) | ||||||||
Assets | ||||||||||||
Investments | $104 | $— | $32 | $72 | ||||||||
Total assets | $104 | $— | $32 | $72 | ||||||||
Liabilities | ||||||||||||
Short-term borrowings | $1,020 | $— | $1,020 | $— | ||||||||
Current maturities of long-term debt and lease obligations | 22 | — | 22 | — | ||||||||
Long-term debt and lease obligations | 15,066 | — | 15,066 | — | ||||||||
Total liabilities | $16,108 | $— | $16,108 | $— |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||
Schedule of accumulated other comprehensive loss | ' | |||||||||||
Foreign | Pension and | Unrealized | ||||||||||
currency | post- | gains (losses) on | Gains (losses) | |||||||||
translation | employment | marketable | on hedging | |||||||||
(in millions) (brackets denote losses) | adjustments | benefits | equity securities | activities | Total | |||||||
Balance as of December 31, 2012 | $181 | ($511) | $1 | ($21) | ($350) | |||||||
Other comprehensive income before reclassifications | 23 | 20 | — | -53 | ($10) | |||||||
Amounts reclassified from accumulated other comprehensive income | — | 57 | — | 4 | $61 | |||||||
Net current-period other comprehensive income | 23 | 77 | — | -49 | $51 | |||||||
Separation-related adjustments | 241 | -934 | — | 11 | ($682) | |||||||
Balance as of September 30, 2013 | $445 | ($1,368) | $1 | ($59) | ($981) | |||||||
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive loss | ' | |||||||||||
Three months ended | Nine months ended | |||||||||||
Type of reclassification (in millions) | September 30, 2013 | September 30, 2013 | ||||||||||
Pension and post-employee benefits | ||||||||||||
Amortization of actuarial losses and other | $30 | $83 | ||||||||||
Less tax expense | -8 | -26 | ||||||||||
Total reclassification, net of tax | $22 | $57 |
PostEmployment_Benefits_Tables
Post-Employment Benefits (Tables) (AbbVie sponsored plans) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
AbbVie sponsored plans | ' | |||||||||
Employee Benefit Plans | ' | |||||||||
Schedule of assumption of the net obligations for pension and other post-employment benefits | ' | |||||||||
Other | ||||||||||
Defined | post-employment | |||||||||
(in millions) | benefit plans | plans | ||||||||
Accumulated benefit obligation | $2,423 | $192 | ||||||||
Deferred losses | -1,434 | -2 | ||||||||
Projected benefit obligations | 2,910 | 192 | ||||||||
Fair value of assets | 2,216 | — | ||||||||
Net liability | $694 | $192 | ||||||||
Summary of net periodic benefit cost relating to the company's pension and other post-employment benefit plans | ' | |||||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
Defined benefit plans | 2013 | 2012 | 2013 | 2012 | ||||||
Service cost | $39 | $5 | $133 | $13 | ||||||
Interest cost | 46 | 8 | 142 | 25 | ||||||
Expected return on plan assets | -63 | -7 | -195 | -17 | ||||||
Amortization of actuarial losses and prior service costs | 30 | 2 | 83 | 3 | ||||||
Net periodic pension benefit cost | $52 | $8 | $163 | $24 | ||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
Other post-employment plans | 2013 | 2012 | 2013 | 2012 | ||||||
Service cost | $5 | $— | $17 | $— | ||||||
Interest cost | 2 | — | 14 | — | ||||||
Expected return on plan assets | — | — | — | — | ||||||
Amortization of actuarial losses and prior service costs | — | — | — | — | ||||||
Net periodic pension benefit cost | $7 | $— | $31 | $— |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Stock-Based Compensation | ' | |||||||||
Schedule of assumptions on which the expense related to stock options granted is primarily based | ' | |||||||||
Risk-free interest rate | 1.10% | |||||||||
Average life of options (years) | 6 | |||||||||
Volatility | 32.63% | |||||||||
Dividend yield | 4.30% | |||||||||
Fair value per stock option | $6.87 | |||||||||
Summary of AbbVie stock option activity for both AbbVie and Abbott employees | ' | |||||||||
Weighted- | ||||||||||
Weighted- | average | |||||||||
average | remaining life (in | Aggregate | ||||||||
(options in thousands, aggregate intrinsic value in millions) | Options | exercise price | years) | intrinsic value | ||||||
Outstanding at December 31, 2012 | — | $— | ||||||||
Options converted on January 1, 2013 | 47,718 | 27 | ||||||||
Granted | 3,128 | 37.91 | ||||||||
Exercised | -11,041 | 27.47 | ||||||||
Lapsed | -221 | 27.71 | ||||||||
Outstanding at September 30, 2013 | 39,584 | $27.73 | 3.7 | $677 | ||||||
Exercisable at September 30, 2013 | 36,007 | $27.28 | 3.3 | $632 | ||||||
Summary of AbbVie RSA and RSU balances for both AbbVie and Abbott employees | ' | |||||||||
Weighted-average | ||||||||||
(share units in thousands) | Share units | grant date fair value | ||||||||
Outstanding at December 31, 2012 | — | $— | ||||||||
Awards converted on January 1, 2013 | 15,394 | 27.55 | ||||||||
Granted | 7,387 | 36.18 | ||||||||
Vested | -7,483 | 27.3 | ||||||||
Lapsed | -423 | 30.39 | ||||||||
Outstanding at September 30, 2013 | 14,875 | $31.89 | ||||||||
Unvested shares at September 30, 2013 | 14,719 | $31.90 |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Segment Information | ' | |||||||||
Schedule of consolidated financial information by segment | ' | |||||||||
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||
HUMIRA | $2,770 | $2,326 | $7,620 | $6,585 | ||||||
AndroGel | 248 | 279 | 746 | 787 | ||||||
Kaletra | 237 | 267 | 734 | 763 | ||||||
Niaspan | 201 | 232 | 619 | 634 | ||||||
Lupron | 196 | 189 | 576 | 589 | ||||||
Synthroid | 161 | 131 | 433 | 383 | ||||||
Sevoflurane | 138 | 135 | 412 | 444 | ||||||
Creon | 101 | 92 | 297 | 248 | ||||||
Zemplar | 100 | 91 | 288 | 276 | ||||||
Synagis | 98 | 96 | 513 | 506 | ||||||
Duodopa | 46 | 37 | 129 | 108 | ||||||
TriCor/TRILIPIX | 39 | 332 | 274 | 897 | ||||||
All other | 323 | 301 | 1,038 | 954 | ||||||
Net sales | $4,658 | $4,508 | $13,679 | $13,174 |
Background_and_Basis_of_Presen1
Background and Basis of Presentation (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Jan. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jan. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
customer | Reduction due to the subsequent correction of an error | Reduction due to the subsequent correction of an error | AbbVie common stock | Abbott | Abbott | Abbott | Abbott | Abbott | Abbott | ||||
Other assets | Transition services agreement | Transition services agreement | Separation agreement | Separation agreement | Separation agreement | Separation agreement | |||||||
Maximum | |||||||||||||
Background and Basis of Presentation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of wholesalers | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding common stock distributed to Abbott Laboratories' shareholders | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' |
Common stock distribution ratio | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Separation-related adjustments recorded in stockholders' equity | ' | ' | $1,233 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders' equity | ' | -3,577 | -3,577 | 350 | 582 | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term deferred tax assets | ' | ' | ' | ' | ' | 582 | ' | ' | ' | ' | ' | ' | ' |
Term for which transition services may be provided | ' | ' | ' | ' | ' | ' | ' | ' | '24 months | ' | ' | ' | ' |
Term by which the agreement can be extended | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' |
Separation-related expenses | ' | 51 | 151 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | 192 | ' | 635 | ' |
Inventories | ' | ' | ' | ' | ' | ' | ' | ' | ' | 84 | ' | 84 | ' |
Trade accounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 214 | ' | 214 | ' |
Other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100 | ' | 100 | ' |
Accounts payable and other accrued liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 232 | ' | 232 | ' |
Expenses allocated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $197 | ' | $599 |
Supplemental_Financial_Informa2
Supplemental Financial Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Inventories | ' | ' | ' | ' | ' |
Finished goods | $478 | ' | $478 | ' | $547 |
Work-in-process | 439 | ' | 439 | ' | 286 |
Raw materials | 255 | ' | 255 | ' | 258 |
Inventories, net | 1,172 | ' | 1,172 | ' | 1,091 |
Property and Equipment, Net | ' | ' | ' | ' | ' |
Property and equipment, gross | 6,790 | ' | 6,790 | ' | 6,542 |
Less accumulated depreciation | -4,546 | ' | -4,546 | ' | -4,295 |
Property and equipment, net | 2,244 | ' | 2,244 | ' | 2,247 |
Depreciation expense | 97 | 93 | 289 | 352 | ' |
Interest Expense (Income), net | ' | ' | ' | ' | ' |
Interest expense | 75 | 10 | 225 | 10 | ' |
Interest income | -6 | -11 | -15 | -14 | ' |
Interest expense (income), net | $69 | ($1) | $210 | ($4) | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Anti-dilutive securities excluded from the computation of earnings per common share | ' | ' |
Earnings allocable to participating securities (in dollars) | $6 | $17 |
RSAs & RSUs | ' | ' |
Anti-dilutive securities excluded from the computation of earnings per common share | ' | ' |
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 5 | 5 |
Stock-based compensation plans | ' | ' |
Anti-dilutive securities excluded from the computation of earnings per common share | ' | ' |
Anti-dilutive securities excluded from the computation of earnings per common share (in shares) | 1 | 1 |
Acquisitions_Collaborations_an1
Acquisitions, Collaborations and Other Arrangements (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 29, 2012 | 31-May-13 | 31-May-12 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 |
Ablynx NV | Galapagos NV | Galapagos NV | Alvine | Action Pharma A/S | Reata | Reata | Maximum | Maximum | ||||
Ablynx NV | Galapagos NV | |||||||||||
Acquisitions, Collaborations and Other Arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash outflows related to acquisitions, collaborations and other arrangements | ' | $358 | $780 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaborations and Other Arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired in-process research and development (IPR&D) charges | 220 | 290 | 260 | 175 | 45 | 150 | ' | 110 | ' | 400 | ' | ' |
Payments for achievement of certain milestones under an agreement | ' | ' | ' | ' | 1,300 | ' | 275 | ' | ' | ' | 665 | 360 |
Initial upfront payment | ' | ' | ' | ' | ' | ' | 70 | ' | ' | ' | ' | ' |
Payments to collaborators for joint development and commercialization of specified products | ' | ' | ' | ' | ' | ' | ' | ' | $400 | ' | ' | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Goodwill | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | $6,130 | ' | ' |
Additions | ' | ' | 25 | ' | ' |
Currency translation and other adjustments | ' | ' | 44 | ' | ' |
Balance at the end of the period | 6,199 | ' | 6,199 | ' | ' |
Accumulated goodwill impairment losses | 0 | ' | 0 | ' | ' |
Definite-lived intangible assets | ' | ' | ' | ' | ' |
Gross carrying amount | 5,734 | ' | 5,734 | ' | 5,668 |
Accumulated amortization | -4,187 | ' | -4,187 | ' | -3,765 |
Net carrying amount | 1,547 | ' | 1,547 | ' | 1,903 |
Indefinite-lived research and development | 446 | ' | 446 | ' | 420 |
Net carrying amount - Indefinite-lived research and development | 446 | ' | 446 | ' | 420 |
Total intangible assets gross carrying amount | 6,180 | ' | 6,180 | ' | 6,088 |
Accumulated amortization - Total intangible assets | -4,187 | ' | -4,187 | ' | -3,765 |
Total intangible assets | 1,993 | ' | 1,993 | ' | 2,323 |
Amortization of intangible assets | 137 | 134 | 408 | 489 | ' |
Impairment charges | ' | ' | 0 | 0 | ' |
Weighted average | ' | ' | ' | ' | ' |
Definite-lived intangible assets | ' | ' | ' | ' | ' |
Useful life | ' | ' | '5 years | ' | ' |
Developed product rights | ' | ' | ' | ' | ' |
Definite-lived intangible assets | ' | ' | ' | ' | ' |
Gross carrying amount | 4,737 | ' | 4,737 | ' | 4,699 |
Accumulated amortization | -3,416 | ' | -3,416 | ' | -3,031 |
Net carrying amount | 1,321 | ' | 1,321 | ' | 1,668 |
License agreements | ' | ' | ' | ' | ' |
Definite-lived intangible assets | ' | ' | ' | ' | ' |
Gross carrying amount | 997 | ' | 997 | ' | 969 |
Accumulated amortization | -771 | ' | -771 | ' | -734 |
Net carrying amount | $226 | ' | $226 | ' | $235 |
Restructuring_Plans_Details
Restructuring Plans (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Restructuring Plans | ' | ' | ' | ' |
Restructuring charges | $11 | $176 | $75 | $206 |
Restructuring reserve activity | ' | ' | ' | ' |
Accrued balance beginning of the period | ' | ' | 193 | ' |
Cash costs included in restructuring charges | 8 | ' | 68 | ' |
Payments and other adjustments | ' | ' | -83 | ' |
Accrued balance end of the period | 178 | ' | 178 | ' |
Reversal of a previously recorded restructuring reserve due to the company's revaluation of a decision to exit a manufacturing facility | ' | ' | 23 | ' |
Employee severance and contractual obligations | ' | ' | ' | ' |
Restructuring Plans | ' | ' | ' | ' |
Restructuring charges | ' | 150 | ' | ' |
Accelerated depreciation, asset impairments and product transfer costs | ' | ' | ' | ' |
Restructuring Plans | ' | ' | ' | ' |
Restructuring charges | ' | 26 | ' | 56 |
Research and development | Employee severance and contractual obligations | ' | ' | ' | ' |
Restructuring Plans | ' | ' | ' | ' |
Restructuring charges | ' | 142 | ' | ' |
Selling, general and administrative expense | Employee severance and contractual obligations | ' | ' | ' | ' |
Restructuring Plans | ' | ' | ' | ' |
Restructuring charges | ' | $8 | ' | ' |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measures (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Derivative instruments, notional amount and fair value | ' | ' |
Derivatives in asset position | $25,000,000 | $15,000,000 |
Derivatives in liability position | 432,000,000 | 106,000,000 |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Notional amount of derivative instruments | 8,000,000,000 | 8,000,000,000 |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | Long-term liabilities | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Derivatives in liability position | 349,000,000 | 81,000,000 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Derivatives in asset position | ' | 1,000,000 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Derivatives in liability position | 57,000,000 | 10,000,000 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Notional amount of derivative instruments | 1,700,000,000 | 1,000,000,000 |
Approximate length of time over which accumulated gains and losses will be recognized in Cost of products sold | '12 months | ' |
Not designated as hedging instrument | Foreign currency forward exchange contracts | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Notional amount of derivative instruments | 4,200,000,000 | 4,300,000,000 |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Derivatives in asset position | 25,000,000 | 14,000,000 |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | ' | ' |
Derivative instruments, notional amount and fair value | ' | ' |
Derivatives in liability position | $26,000,000 | $15,000,000 |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value Measures (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Interest rate contracts | Fair value hedges | Interest expense, net | ' | ' | ' | ' |
Gain (loss) on derivatives | ' | ' | ' | ' |
Income (expense) and gain (loss) reclassified into | $47 | ' | ($268) | ' |
Gain (loss) on underlying hedged item | -47 | ' | 268 | ' |
Foreign currency forward exchange contracts | Not designated as hedging instrument | Net foreign exchange loss | ' | ' | ' | ' |
Gain (loss) on derivatives | ' | ' | ' | ' |
Income (expense) and gain (loss) reclassified into | 9 | 4 | 49 | -17 |
Foreign currency forward exchange contracts | Cash flow hedges | Cost of products sold | ' | ' | ' | ' |
Gain (loss) on derivatives | ' | ' | ' | ' |
(Loss) gain recognized in other comprehensive (loss) income | -62 | -1 | -53 | -3 |
Income (expense) and gain (loss) reclassified into | ($2) | $7 | ($4) | $16 |
Financial_Instruments_and_Fair4
Financial Instruments and Fair Value Measures (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Liabilities | ' | ' |
Gross unrealized holding gains on available-for-sale equity securities | $2 | $1 |
Fair value | ' | ' |
Assets | ' | ' |
Short term investments | 125 | 104 |
Total assets | 125 | 104 |
Liabilities | ' | ' |
Total liabilities | 14,658 | 16,108 |
Significant other observable inputs (Level 2) | ' | ' |
Assets | ' | ' |
Short term investments | 32 | 32 |
Total assets | 32 | 32 |
Liabilities | ' | ' |
Total liabilities | 14,658 | 16,108 |
Significant unobservable inputs (Level 3) | ' | ' |
Assets | ' | ' |
Short term investments | 93 | 72 |
Total assets | 93 | 72 |
Recurring | Fair value | ' | ' |
Assets | ' | ' |
Cash and equivalents | 8,975 | 5,901 |
Equity securities | 9 | 12 |
Foreign currency contracts | 25 | 15 |
Total assets | 9,630 | 8,003 |
Liabilities | ' | ' |
Interest rate hedges | 349 | 81 |
Foreign currency hedges | 83 | 25 |
Contingent consideration | 160 | 251 |
Total liabilities | 592 | 357 |
Recurring | Fair value | Certificates of deposit | ' | ' |
Assets | ' | ' |
Short term investments | 621 | 1,775 |
Recurring | Fair value | U.S. Treasury securities | ' | ' |
Assets | ' | ' |
Short term investments | ' | 300 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' |
Assets | ' | ' |
Cash and equivalents | 533 | 675 |
Equity securities | 9 | 12 |
Total assets | 542 | 987 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | U.S. Treasury securities | ' | ' |
Assets | ' | ' |
Short term investments | ' | 300 |
Recurring | Significant other observable inputs (Level 2) | ' | ' |
Assets | ' | ' |
Cash and equivalents | 8,442 | 5,226 |
Foreign currency contracts | 25 | 15 |
Total assets | 9,088 | 7,016 |
Liabilities | ' | ' |
Interest rate hedges | 349 | 81 |
Foreign currency hedges | 83 | 25 |
Total liabilities | 432 | 106 |
Recurring | Significant other observable inputs (Level 2) | Certificates of deposit | ' | ' |
Assets | ' | ' |
Short term investments | 621 | 1,775 |
Recurring | Significant unobservable inputs (Level 3) | ' | ' |
Liabilities | ' | ' |
Contingent consideration | 160 | 251 |
Total liabilities | $160 | $251 |
Financial_Instruments_and_Fair5
Financial Instruments and Fair Value Measures (Details 4) (USD $) | 9 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Mar. 31, 2013 |
Contingent payments related to acquisitions | ||
Solvay SA Pharmaceuticals | ||
Reconciliation of the fair value measurements that use significant unobservable inputs (Level 3) | ' | ' |
Fair value at the beginning of the period | $251 | ' |
Payments | -131 | -131 |
Additions | 28 | ' |
Loss recognized in earnings | 12 | ' |
Fair value at the end of the period | 160 | ' |
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_Fair6
Financial Instruments and Fair Value Measures (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Book values | ' | ' |
Assets | ' | ' |
Investments | $114 | $107 |
Liabilities | ' | ' |
Short-term borrowings | 411 | 1,020 |
Current maturities of long-term debt and lease obligations | 23 | 22 |
Long-term debt and lease obligations | 14,375 | 14,630 |
Approximate fair values | ' | ' |
Assets | ' | ' |
Investments | 125 | 104 |
Liabilities | ' | ' |
Short-term borrowings | 411 | 1,020 |
Current maturities of long-term debt and lease obligations | 23 | 22 |
Long-term debt and lease obligations | $14,224 | $15,066 |
Financial_Instruments_and_Fair7
Financial Instruments and Fair Value Measures (Details 6) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair value | ' | ' |
Assets | ' | ' |
Investments | $125 | $104 |
Total assets | 125 | 104 |
Liabilities | ' | ' |
Short-term borrowings | 411 | 1,020 |
Current maturities of long-term debt and lease obligations | 23 | 22 |
Long-term debt and lease obligations | 14,224 | 15,066 |
Total liabilities | 14,658 | 16,108 |
Significant other observable inputs (Level 2) | ' | ' |
Assets | ' | ' |
Investments | 32 | 32 |
Total assets | 32 | 32 |
Liabilities | ' | ' |
Short-term borrowings | 411 | 1,020 |
Current maturities of long-term debt and lease obligations | 23 | 22 |
Long-term debt and lease obligations | 14,224 | 15,066 |
Total liabilities | 14,658 | 16,108 |
Significant unobservable inputs (Level 3) | ' | ' |
Assets | ' | ' |
Investments | 93 | 72 |
Total assets | $93 | $72 |
Financial_Instruments_and_Fair8
Financial Instruments and Fair Value Measures (Details 7) (USD $) | 9 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Concentration of Risk | ' | ' |
Number of principal customers | 3 | ' |
Governmental accounts in Greece, Portugal, Italy and Spain | ' | ' |
Concentration of Risk | ' | ' |
Net governmental receivables outstanding | 804 | 725 |
Net accounts receivables | ' | ' |
Concentration of Risk | ' | ' |
Number of principal customers | 3 | ' |
Net accounts receivables | U.S. wholesalers | ' | ' |
Concentration of Risk | ' | ' |
Concentrations risk (as a percent) | 39.00% | 48.00% |
Financial_Instruments_and_Fair9
Financial Instruments and Fair Value Measures (Details 8) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Short-Term Borrowings | ' | ' |
Short-term borrowings | $411 | $1,020 |
Borrowings outstanding under the company's credit facility | 0 | ' |
Commercial paper | ' | ' |
Short-Term Borrowings | ' | ' |
Short-term borrowings | $400 | ' |
Weighted-average interest rate (as a percent) | 0.30% | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Foreign currency translation adjustments | Pension and post-employment benefits | Unrealized gains (losses) on marketable equity securities | Unrealized gains (losses) on marketable equity securities | Gains (losses) on hedging activities | |||||
Changes in accumulated other comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | ' | ' | ($350) | ' | $181 | ($511) | $1 | $1 | ($21) |
Other comprehensive income before reclassifications | ' | ' | -10 | ' | 23 | 20 | ' | ' | -53 |
Amounts reclassified from accumulated other comprehensive income | ' | ' | 61 | ' | ' | 57 | ' | ' | 4 |
Other comprehensive income (loss) | 188 | 281 | 51 | -19 | 23 | 77 | ' | ' | -49 |
Separation-related adjustments | ' | ' | -1,233 | ' | 241 | -934 | ' | ' | 11 |
Ending balance | ($981) | ' | ($981) | ' | $445 | ($1,368) | $1 | $1 | ($59) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss (Details 2) (Pension and post-employment benefits, Amount reclassified from accumulated other comprehensive loss, USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Pension and post-employment benefits | Amount reclassified from accumulated other comprehensive loss | ' | ' |
Significant amounts reclassified out of each component of AOCI | ' | ' |
Amortization of actuarial losses and other | $30 | $83 |
Less tax expense | -8 | -26 |
Net earnings | $22 | $57 |
PostEmployment_Benefits_Detail
Post-Employment Benefits (Details) (AbbVie Sponsored Plans, USD $) | 3 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Defined benefit plans | Defined benefit plans | Defined benefit plans | Defined benefit plans | Other post-employment plans | Other post-employment plans | |||
Post-Employment Benefits | ' | ' | ' | ' | ' | ' | ' | ' |
Defined benefit pension and other post-employment plans assets recognized | ' | $0 | ' | ' | ' | ' | ' | ' |
Defined benefit pension and other post-employment plans liabilities recognized | ' | 0 | ' | ' | ' | ' | ' | ' |
Assumption of obligations for pension and other post-employment benefits | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated benefit obligations | ' | ' | 2,423 | ' | 2,423 | ' | 192 | 192 |
Deferred losses | ' | ' | -1,434 | ' | -1,434 | ' | -2 | -2 |
Projected benefit obligations | ' | ' | 2,910 | ' | 2,910 | ' | 192 | 192 |
Fair value of assets | ' | ' | 2,216 | ' | 2,216 | ' | ' | ' |
Net liability | ' | ' | 694 | ' | 694 | ' | 192 | 192 |
Increase (decrease) in net liabilities assumed | ' | ' | 72 | ' | ' | ' | -78 | ' |
Net Periodic Benefit Cost | ' | ' | ' | ' | ' | ' | ' | ' |
Service cost | ' | ' | 39 | 5 | 133 | 13 | 5 | 17 |
Interest cost | ' | ' | 46 | 8 | 142 | 25 | 2 | 14 |
Expected return on plan assets | ' | ' | -63 | -7 | -195 | -17 | ' | ' |
Amortization of actuarial losses and prior service costs | ' | ' | 30 | 2 | 83 | 3 | ' | ' |
Net periodic pension benefit cost | ' | ' | 52 | 8 | 163 | 24 | 7 | 31 |
Contribution by employer | $145 | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 02, 2013 | Jan. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Abbott | Stock Options | Stock Options | RSAs & RSUs | RSAs & RSUs | |||||
item | |||||||||
Stock-Based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock compensation expense recognized | $41 | $30 | $175 | $156 | ' | ' | ' | ' | ' |
Number of awards received in connection with the separation | ' | ' | ' | ' | 1 | ' | ' | ' | ' |
Assumptions on which the expense related to stock options granted is based | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 1.10% | ' | ' |
Average life of options | ' | ' | ' | ' | ' | ' | '6 years | ' | ' |
Volatility (as a percent) | ' | ' | ' | ' | ' | ' | 32.63% | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | ' | ' | ' | 4.30% | ' | ' |
Fair value per stock option (in dollars per share) | ' | ' | ' | ' | ' | ' | $6.87 | ' | ' |
Options | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options converted (in shares) | ' | ' | ' | ' | ' | 47,718 | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | ' | ' | 3,128 | ' | ' |
Exercised (in shares) | ' | ' | ' | ' | ' | ' | -11,041 | ' | ' |
Lapsed (in shares) | ' | ' | ' | ' | ' | ' | -221 | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | 39,584 | ' | ' |
Exercisable at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | 36,007 | ' | ' |
Weighted average exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options converted (in dollars per share) | ' | ' | ' | ' | ' | $27 | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | $37.91 | ' | ' |
Exercised (in dollars per share) | ' | ' | ' | ' | ' | ' | $27.47 | ' | ' |
Lapsed (in dollars per share) | ' | ' | ' | ' | ' | ' | $27.71 | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | $27.73 | ' | ' |
Exercisable at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | $27.28 | ' | ' |
Weighted average remaining life (in years) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | ' | ' | ' | ' | ' | '3 years 8 months 12 days | ' | ' |
Exercisable at end of the period | ' | ' | ' | ' | ' | ' | '3 years 3 months 18 days | ' | ' |
Aggregate intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | ' | ' | ' | ' | ' | 677 | ' | ' |
Exercisable at the end of the period | ' | ' | ' | ' | ' | ' | 632 | ' | ' |
Additional information | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost | ' | ' | ' | ' | ' | ' | 3 | ' | ' |
Period for recognition of unrecognized compensation cost | ' | ' | ' | ' | ' | ' | '2 years | ' | '2 years |
Aggregate intrinsic value of options exercised | 41 | ' | 157 | ' | ' | ' | ' | ' | ' |
Share units | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards converted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 15,394 |
Granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 7,387 |
Vested (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | -7,483 |
Lapsed (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | -423 |
Outstanding at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | 14,875 | 14,875 |
Unvested shares at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | 14,719 | 14,719 |
Weighted average grant date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards converted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $27.55 |
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $36.18 |
Vested (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $27.30 |
Lapsed (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $30.39 |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $31.89 |
Unvested shares at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $31.90 | $31.90 |
Additional information | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair market value of awards vested | ' | ' | ' | ' | ' | ' | ' | 5 | 282 |
Unrecognized compensation cost | ' | ' | ' | ' | ' | ' | ' | $198 | $198 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Taxes | ' | ' | ' | ' |
Effective income tax rate (as a percent) | 25.00% | 1.20% | 22.90% | 7.00% |
Statutory federal income tax rate (as a percent) | ' | ' | 35.00% | 35.00% |
Recognition of tax benefits as a result of the favorable resolution of various tax positions pertaining to a prior year | ' | $190 | ' | ' |
Litigation_Details
Litigation (Details) (Depakote, USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
31-May-12 | Mar. 31, 2012 | Sep. 30, 2011 | Dec. 31, 2012 | |
usstates | ||||
Depakote | ' | ' | ' | ' |
Litigation | ' | ' | ' | ' |
Charges recorded related to Depakote during the period | ' | $100,000,000 | $1,500,000,000 | ' |
Number of states with whom Medicaid-related claims were resolved | 49 | ' | ' | ' |
Number of states with whom consumer protection claims were resolved | 45 | ' | ' | ' |
Settlement amount paid | ' | ' | ' | $1,600,000,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
segment | ||||
customer | ||||
Segment Information | ' | ' | ' | ' |
Number of Operating Segments | ' | ' | 1 | ' |
Number of principal customers | ' | ' | 3 | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | $4,658 | $4,508 | $13,679 | $13,174 |
HUMIRA | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 2,770 | 2,326 | 7,620 | 6,585 |
AndroGel | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 248 | 279 | 746 | 787 |
Kaletra | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 237 | 267 | 734 | 763 |
Niaspan | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 201 | 232 | 619 | 634 |
Lupron | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 196 | 189 | 576 | 589 |
Synthroid | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 161 | 131 | 433 | 383 |
Sevoflurane | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 138 | 135 | 412 | 444 |
Creon | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 101 | 92 | 297 | 248 |
Zemplar | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 100 | 91 | 288 | 276 |
Synagis | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 98 | 96 | 513 | 506 |
Duodopa | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 46 | 37 | 129 | 108 |
TriCor/TRILIPIX | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | 39 | 332 | 274 | 897 |
All other | ' | ' | ' | ' |
Segment and Geographic Area Information | ' | ' | ' | ' |
Net sales | $323 | $301 | $1,038 | $954 |