Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document and Entity Information | |
Entity Registrant Name | AbbVie Inc. |
Entity Central Index Key | 1551152 |
Document Type | 10-Q |
Document Period End Date | 31-Mar-15 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 1,593,076,097 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Consolidated_Statements_of_Ear
Consolidated Statements of Earnings (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidated Statements of Earnings | ||
Net sales | $5,040 | $4,563 |
Cost of products sold | 942 | 1,100 |
Selling, general and administrative | 1,473 | 1,340 |
Research and development | 811 | 772 |
Acquired in-process research and development | 127 | |
Total operating costs and expenses | 3,353 | 3,212 |
Operating earnings | 1,687 | 1,351 |
Interest expense, net | 126 | 65 |
Net foreign exchange loss | 164 | 3 |
Other expense (income), net | 1 | -3 |
Earnings before income tax expense | 1,396 | 1,286 |
Income tax expense | 374 | 306 |
Net earnings | $1,022 | $980 |
Per share data | ||
Basic earnings per share (in dollars per share) | $0.64 | $0.61 |
Diluted earnings per share (in dollars per share) | $0.63 | $0.61 |
Cash dividends declared per common share (in dollars per share) | $0.51 | $0.42 |
Weighted-average basic shares outstanding (in shares) | 1,595 | 1,595 |
Weighted-average diluted shares outstanding (in shares) | 1,608 | 1,609 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Consolidated Statements of Comprehensive Income | ||
Net earnings | $1,022 | $980 |
Foreign currency translation adjustments, net of tax benefit of $(129) and $(3) for the three months ended March 31, 2015 and 2014, respectively | -549 | -29 |
Pension and post-employment benefits, net of tax expense of $10 and $4 for the three months ended March 31, 2015 and 2014, respectively | 55 | 12 |
Unrealized gains on marketable equity securities, net of tax expense of $- for the three months ended March 31, 2015 | 1 | |
Hedging activities, net of tax expense of $2 for both the three months ended March 31, 2015 and 2014 | 57 | 33 |
Other comprehensive (loss) income | -436 | 16 |
Comprehensive income | $586 | $996 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Consolidated Statements of Comprehensive Income | ||
Foreign currency translation adjustments, tax (benefit) expense | ($129) | ($3) |
Pension and post-employment benefits, tax (benefit) expense | 10 | 4 |
Hedging activities, tax expense (benefit) | $2 | $2 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current assets | ||
Cash and equivalents | $7,906 | $8,348 |
Short-term investments | 18 | 26 |
Accounts and other receivables, net | 4,214 | 3,735 |
Inventories, net | 1,022 | 1,124 |
Income tax receivable | 142 | 556 |
Deferred income taxes | 1,056 | 896 |
Prepaid expenses and other | 1,050 | 1,403 |
Total current assets | 15,408 | 16,088 |
Investments | 93 | 92 |
Property and equipment, net | 2,431 | 2,485 |
Intangible assets, net of amortization | 1,478 | 1,513 |
Goodwill | 5,534 | 5,862 |
Other assets | 1,755 | 1,507 |
Total assets | 26,699 | 27,547 |
Current liabilities | ||
Short-term borrowings | 569 | 425 |
Current portion of long-term debt and lease obligations | 4,021 | 4,021 |
Accounts payable and accrued liabilities | 6,460 | 6,954 |
Total current liabilities | 11,050 | 11,400 |
Long-term liabilities | 3,589 | 3,840 |
Long-term debt and lease obligations | 10,683 | 10,565 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value, authorized 4,000,000,000 shares, issued 1,617,065,448 and 1,609,519,046 shares as of March 31, 2015 and December 31, 2014, respectively | 16 | 16 |
Common stock held in treasury, at cost, 23,989,351 and 18,129,715 shares as of March 31, 2015 and December 31, 2014, respectively | -1,314 | -972 |
Additional paid-in-capital | 4,403 | 4,194 |
Retained earnings | 739 | 535 |
Accumulated other comprehensive loss | -2,467 | -2,031 |
Total stockholders' equity | 1,377 | 1,742 |
Total liabilities and equity | $26,699 | $27,547 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Common stock, issued (in shares) | 1,617,065,448 | 1,609,519,046 |
Common stock held in treasury, at cost (in shares) | 23,989,351 | 18,129,715 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net earnings | $1,022 | $980 |
Adjustments to reconcile net earnings to net cash from operating activities: | ||
Depreciation | 90 | 89 |
Amortization of intangible assets | 68 | 110 |
Stock-based compensation | 119 | 106 |
Upfront costs related to collaborations | 127 | |
Other, net | 249 | -47 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts and other receivables | -544 | 167 |
Inventories | -75 | 50 |
Prepaid expenses and other assets | 341 | -219 |
Accounts payable and other liabilities | 188 | -612 |
Cash flows from operating activities | 1,585 | 624 |
Cash flows from investing activities | ||
Acquisitions and investments, net of cash acquired | -736 | |
Acquisitions of property and equipment | -145 | -137 |
Purchases of investment securities | -660 | |
Sales and maturities of investment securities | 8 | |
Cash flows from investing activities | -873 | -797 |
Cash flows from financing activities | ||
Net change in short-term borrowings | 144 | -410 |
Dividends paid | -786 | -641 |
Debt issuance costs | -59 | |
Purchases of treasury stock | -342 | -329 |
Proceeds from the exercise of stock options | 47 | 85 |
Other, net | 66 | 18 |
Cash flows from financing activities | -930 | -1,277 |
Effect of exchange rate changes on cash and equivalents | -224 | -5 |
Net decrease in cash and equivalents | -442 | -1,455 |
Cash and equivalents, beginning of period | 8,348 | 9,595 |
Cash and equivalents, end of period | $7,906 | $8,140 |
Background_and_Basis_of_Presen
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Background and Basis of Presentation | |
Background and Basis of Presentation | Note 1Background and Basis of Presentation |
Background | |
The principal business of AbbVie Inc. (AbbVie or the company) is the discovery, development, manufacture, and sale of a broad line of pharmaceutical products. AbbVie’s products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies, and independent retailers from AbbVie-owned distribution centers and public warehouses. Substantially all of AbbVie’s sales in the United States are to three wholesalers. Outside the United States, products are sold primarily to customers or through distributors, depending on the market served. | |
AbbVie was incorporated in Delaware on April 10, 2012. On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories (Abbott) of 100 percent of the outstanding common stock of AbbVie to Abbott’s shareholders (the separation). In connection with the separation, AbbVie and Abbott entered into transition services agreements covering certain corporate support and back office services that AbbVie historically received from Abbott. Such services include information technology, accounts payable, payroll, receivables collection, treasury and other financial functions, as well as order entry, warehousing, engineering support, quality assurance support and other administrative services. These agreements facilitated the separation by allowing AbbVie to operate independently prior to establishing stand-alone back office functions across its organization. The majority of these transition service agreements expired without extension at December 31, 2014; however, some of these services continue to be provided to AbbVie on a temporary basis. The remaining transition services agreements are expected to terminate during 2015. | |
During the three months ended March 31, 2015 and 2014, AbbVie incurred $104 million and $80 million, respectively, of separation-related expenses, which were principally classified in selling, general and administrative (SG&A) expenses in the condensed consolidated statements of earnings. | |
Basis of Historical Presentation | |
The unaudited interim condensed consolidated financial statements of AbbVie have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the company’s audited consolidated financial statements and notes included in the company’s Annual Report on Form 10-K for the year ended December 31, 2014. | |
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 March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014. Net sales related to these operations for the three months ended March 31, 2015 totaled approximately $49 million. The majority of these operations are expected to be transferred to AbbVie by the end of 2015. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs–Contracts with Customers (Subtopic 340-40). The amendments in ASU 2014-09 supersede most current revenue recognition requirements. The core principal of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. AbbVie is currently assessing the impact of adopting this guidance on its consolidated financial statements and the implementation approach to be used. In April 2015, the FASB voted for a one-year deferral of the effective date of ASU 2014-09. If approved, the new guidance will be effective for annual and interim periods beginning on or after December 15, 2017. | |
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015. | |
Supplemental_Financial_Informa
Supplemental Financial Information | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Supplemental Financial Information | ||||||
Supplemental Financial Information | Note 2Supplemental Financial Information | |||||
Interest Expense, Net | ||||||
Three months ended | ||||||
March 31, | ||||||
(in millions) | 2015 | 2014 | ||||
Interest expense | $ | $ | ||||
132 | 70 | |||||
Interest income | (6 | ) | (5 | ) | ||
Interest expense, net | $ | $ | ||||
126 | 65 | |||||
Interest expense, net for the three months ended March 31, 2015 included $59 million of financing-related costs incurred in connection with the proposed acquisition of Pharmacyclics, Inc. (Pharmacyclics). | ||||||
Inventories | ||||||
(in millions) | March 31, | December 31, | ||||
2015 | 2014 | |||||
Finished goods | $ | $ | ||||
291 | 341 | |||||
Work-in-process | 568 | 629 | ||||
Raw materials | 163 | 154 | ||||
Inventories, net | $ | $ | ||||
1,022 | 1,124 | |||||
Property and Equipment | ||||||
(in millions) | March 31, | December 31, | ||||
2015 | 2014 | |||||
Property and equipment, gross | $ | $ | ||||
6,988 | 7,105 | |||||
Less accumulated depreciation | (4,557 | ) | (4,620 | ) | ||
Property and equipment, net | $ | $ | ||||
2,431 | 2,485 | |||||
Depreciation expense for the three months ended March 31, 2015 and 2014 was $90 million and $89 million, respectively. | ||||||
Earnings_Per_Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2015 | |
Earnings Per Share | |
Earnings Per Share | Note 3Earnings Per Share |
AbbVie calculates earnings per share (EPS) using the more dilutive of the treasury stock or the two-class method. For both the three months ended March 31, 2015 and 2014, the two-class method was more dilutive. As such, the dilutive effect of outstanding restricted stock units (RSUs) and restricted stock awards (RSAs) for the three months ended March 31, 2015 and 2014 of approximately 3 million and 4 million, respectively, was excluded from the denominator for the calculation of diluted EPS. These awards otherwise would have been included in the calculation of EPS under the treasury stock method. Additionally, all earnings (distributed and undistributed) allocable to participating securities, including performance-based awards not otherwise included in the calculation of EPS under the treasury stock method, were excluded from the numerator for the calculation of basic and diluted earnings per share under the two-class method. Earnings allocable to participating securities for the three months ended March 31, 2015 and 2014 were $5 million and $4 million, respectively. | |
For the three months ended March 31, 2015 and 2014, approximately 0.5 million and 1 million, respectively, 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 | 3 Months Ended |
Mar. 31, 2015 | |
Acquisitions, Collaborations and Other Arrangements | |
Acquisitions, Collaborations and Other Arrangements | Note 4Acquisitions, Collaborations and Other Arrangements |
For the three months ended March 31, 2015, the company recorded acquired in-process research and development (IPR&D) charges of $127 million. Cash outflows related to collaborations, the acquisition of product rights and other arrangements totaled $736 million for the three months ended March 31, 2015, and included a $500 million payment to Calico Life Sciences LLC (Calico) as a result of the satisfaction of certain conditions under the research and development (R&D) collaboration with Calico for which a charge to IPR&D was recorded in 2014. | |
In March 2015, AbbVie entered into an exclusive worldwide license agreement with C2N Diagnostics to develop and commercialize anti-tau antibodies for the treatment of Alzheimer’s disease and other neurological disorders. As part of the agreement, AbbVie made an initial upfront payment of $100 million, which was expensed to IPR&D in the three months ended March 31, 2015. Upon the achievement of certain development, regulatory and commercial milestones, AbbVie could make additional payments of up to $685 million, as well as royalties on net sales. | |
No material transactions or cash flows related to significant arrangements were recognized during the three months ended March 31, 2014. | |
Proposed Acquisition of Pharmacyclics, Inc. | |
On March 4, 2015, AbbVie announced it had entered into a definitive agreement to acquire all of the outstanding shares of Pharmacyclics. Pharmacyclics is a biopharmaceutical company that develops and commercializes novel therapies intended to improve quality of life, increase duration of life and resolve medical needs for people impacted by cancer and immune-mediated diseases. Pharmacyclics markets IMBRUVICA® (ibrutinib) and has several other product candidates in clinical development and preclinical molecules in lead optimization. | |
Under the terms of the agreement, AbbVie will acquire all of the outstanding shares of common stock of Pharmacyclics through a tender offer, followed by a second-step merger. In the tender offer, AbbVie has offered to acquire all of the outstanding shares of Pharmacyclics common stock for $261.25 per share, consisting of cash and AbbVie common stock. Pharmacyclics stockholders will be permitted to elect to exchange each outstanding Pharmacyclics share for (i) $152.25 in cash and $109.00 in fair market value of shares of AbbVie common stock, (ii) $261.25 in cash, or (iii) $261.25 in fair market value of shares of AbbVie common stock, subject to election and proration procedures. The aggregate consideration will consist of approximately 58 percent cash and 42 percent AbbVie common stock. The aggregate purchase price to acquire Pharmacyclics is expected to be approximately $21 billion and was approved by the boards of directors of both companies. AbbVie expects to close the transaction in the second quarter of 2015. | |
The obligation of AbbVie to accept for exchange, and to exchange, Pharmacyclics shares for cash and shares of AbbVie common stock in the offer is subject to a number of conditions, including that a majority of the outstanding Pharmacyclics shares have been validly tendered (and not properly withdrawn) in the offer and the receipt of the required regulatory approvals. | |
On March 27, 2015, in connection with the proposed acquisition of Pharmacyclics, AbbVie entered into an $18 billion, 364-Day Bridge Term Loan Credit Agreement (the bridge loan). No amounts have been drawn under the bridge loan. AbbVie intends to issue approximately $17 billion aggregate principal amount of senior notes to fund the proposed acquisition of Pharmacyclics. Upon this issuance, AbbVie intends to terminate in whole the unused commitments of the lenders under the bridge loan. | |
During the three months ended March 31, 2015, the company incurred financing-related costs totaling $59 million, which was recorded in interest expense. | |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||
Goodwill and Intangible Assets | Note 5Goodwill and Intangible Assets | |||||||||||||
Goodwill | ||||||||||||||
The carrying amount of goodwill was $5.5 billion and $5.9 billion at March 31, 2015 and December 31, 2014, respectively. Changes in the goodwill balance for the three months ended March 31, 2015 were due to foreign currency translation. As of March 31, 2015, there were no accumulated goodwill impairment losses. Future impairment tests for goodwill will be performed annually in the third quarter, or earlier if indicators of impairment exist. | ||||||||||||||
Intangible Assets, Net | ||||||||||||||
The following table summarizes AbbVie’s intangible assets: | ||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
(in millions) | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||
carrying | amortization | carrying | carrying | amortization | carrying | |||||||||
amount | amount | amount | amount | |||||||||||
Definite-lived intangible assets | ||||||||||||||
Developed product rights | $ | $ | ) | $ | $ | $ | ) | $ | ||||||
4,526 | (3,742 | 784 | 4,546 | (3,706 | 840 | |||||||||
License agreements | 1,176 | (889 | ) | 287 | 1,097 | (869 | ) | 228 | ||||||
Total definite-lived intangible assets | 5,702 | (4,631 | ) | 1,071 | 5,643 | (4,575 | ) | 1,068 | ||||||
Indefinite-lived research and development | 407 | — | 407 | 445 | — | 445 | ||||||||
Total intangible assets, net | $ | $ | ) | $ | $ | $ | ) | $ | ||||||
6,109 | (4,631 | 1,478 | 6,088 | (4,575 | 1,513 | |||||||||
Intangible assets with finite useful lives are amortized over their estimated useful lives. Amortization expense was $68 million and $110 million for the three months ended March 31, 2015 and 2014, respectively, and is included in cost of products sold in the condensed consolidated statements of earnings. | ||||||||||||||
The indefinite-lived intangible assets represent acquired IPR&D associated with products that have not yet received regulatory approval. The latest impairment assessment of intangible assets not subject to amortization was completed in the third quarter of 2014. No impairment charges were recorded in the three months ended March 31, 2015 and 2014. 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 | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Restructuring Plans | ||||
Restructuring Plans | Note 6Restructuring Plans | |||
In 2014 and prior years, AbbVie management approved plans to realign its worldwide manufacturing operations, selected domestic and international commercial, and R&D operations in order to reduce costs in conjunction with the loss and expected loss of exclusivity of certain products. Restructuring charges recorded for the three months ended March 31, 2015 were $9 million and were recorded in cost of products sold in the condensed consolidated statements of earnings. These charges were cash costs and primarily related to employee severance. | ||||
The following summarizes the cash activity in the restructuring reserve for the three months ended March 31, 2015: | ||||
(in millions) | ||||
Accrued balance at December 31, 2014 | $ | |||
122 | ||||
2015 restructuring charges | 9 | |||
Payments and other adjustments | (12 | ) | ||
Accrued balance at March 31, 2015 | $ | |||
119 | ||||
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measures | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Financial Instruments and Fair Value Measures | ||||||||||
Financial Instruments and Fair Value Measures | Note 7Financial 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 $915 million and $1.4 billion at March 31, 2015 and December 31, 2014, respectively, are designated as cash flow hedges and are recorded at fair value. Accumulated gains and losses as of March 31, 2015 will be included in cost of products sold at the time the products are sold, generally not exceeding twelve months. | ||||||||||
The company enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. The contracts are marked-to-market, and resulting gains or losses are reflected in income and are generally offset by losses or gains on the foreign currency exposure being managed. At March 31, 2015 and December 31, 2014, AbbVie held notional amounts of $5.0 billion and $6.8 billion, respectively, of such foreign currency forward exchange contracts. | ||||||||||
AbbVie is a party to interest rate hedge contracts, designated as fair value hedges, totaling $8.0 billion at both March 31, 2015 and December 31, 2014. 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 March 31, 2015: | ||||||||||
Fair value – | Fair value – | |||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||
(in millions) | Balance sheet caption | Amount | Balance sheet caption | Amount | ||||||
Foreign currency forward exchange contracts — | ||||||||||
Hedging instruments | Prepaid expenses and other | $ | Accounts payable and accrued liabilities | $— | ||||||
149 | ||||||||||
Others not designated as hedges | Prepaid expenses and other | 50 | Accounts payable and accrued liabilities | 34 | ||||||
Interest rate swaps designated as fair value hedges | n/a | — | Long-term liabilities | 59 | ||||||
Total derivatives | $ | $ | ||||||||
199 | 93 | |||||||||
The following table summarizes the amounts and location of AbbVie’s derivative instruments as of December 31, 2014: | ||||||||||
Fair value — | Fair value — | |||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||
(in millions) | Balance sheet caption | Amount | Balance sheet caption | Amount | ||||||
Foreign currency forward exchange contracts — | ||||||||||
Hedging instruments | Prepaid expenses and other | $ | Accounts payable and accrued liabilities | $— | ||||||
141 | ||||||||||
Others not designated as hedges | Prepaid expenses and other | 70 | Accounts payable and accrued liabilities | 63 | ||||||
Interest rate swaps designated as fair value hedges | n/a | — | Long-term liabilities | 180 | ||||||
Total derivatives | $ | $ | ||||||||
211 | 243 | |||||||||
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 unrealized gains for the effective portions of the derivative instruments designated as cash flow hedges recognized in other comprehensive income were $87 million and $21 million for the three months ended March 31, 2015 and 2014, respectively. The amount of hedge ineffectiveness was not significant for the three months ended March 31, 2015 and 2014. | ||||||||||
The following table summarizes the location in the condensed consolidated statements of earnings and the amount of gain/(loss) recognized into net earnings for derivative instruments, including the effective portions of the gain/(loss) reclassified out of accumulated other comprehensive loss into net earnings: | ||||||||||
Three months ended | ||||||||||
March 31, | ||||||||||
(in millions) | Income statement caption | 2015 | 2014 | |||||||
Foreign currency forward exchange contracts — | ||||||||||
Designated as cash flow hedges | Cost of products sold | $ | $ | ) | ||||||
31 | (12 | |||||||||
Not designated as hedges | Net foreign exchange loss | (169 | ) | (1 | ) | |||||
Interest rate swaps designated as fair value hedges | Interest expense, net | 121 | 86 | |||||||
Total | $ | ) | $ | |||||||
(17 | 73 | |||||||||
The gain/(loss) related to fair value hedges is recognized in interest expense, net and directly offsets the (loss)/gain on the underlying hedged item, the fixed-rate debt, resulting in no net impact to interest expense, net for the three months ended March 31, 2015 and 2014. | ||||||||||
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 sheet as of March 31, 2015: | ||||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Balance at | Quoted prices in active | Significant | Significant | ||||||
March 31, | markets for identical | other observable | unobservable | |||||||
2015 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Cash and equivalents | $ | $ | $ | $— | ||||||
7,906 | 992 | 6,914 | ||||||||
Equity securities | 15 | 15 | — | — | ||||||
Foreign currency contracts | 199 | — | 199 | — | ||||||
Total assets | $ | $ | $ | $— | ||||||
8,120 | 1,007 | 7,113 | ||||||||
Liabilities | ||||||||||
Interest rate hedges | $ | $— | $ | $— | ||||||
59 | 59 | |||||||||
Foreign currency contracts | 34 | — | 34 | — | ||||||
Total liabilities | $ | $— | $ | $— | ||||||
93 | 93 | |||||||||
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 sheet as of December 31, 2014:k | ||||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Balance at | Quoted prices in active | Significant | Significant | ||||||
December 31, | markets for identical | other observable | unobservable | |||||||
2014 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Cash and equivalents | $ | $ | $ | $— | ||||||
8,348 | 1,214 | 7,134 | ||||||||
Time deposits | 9 | — | 9 | — | ||||||
Equity securities | 13 | 13 | — | — | ||||||
Foreign currency contracts | 211 | — | 211 | — | ||||||
Total assets | $ | $ | $ | $— | ||||||
8,581 | 1,227 | 7,354 | ||||||||
Liabilities | ||||||||||
Interest rate hedges | $ | $— | $ | $— | ||||||
180 | 180 | |||||||||
Foreign currency contracts | 63 | — | 63 | — | ||||||
Total liabilities | $ | $— | $ | $— | ||||||
243 | 243 | |||||||||
The fair values for time deposits included in cash and equivalents and short-term investments are determined based on a discounted cash flow analysis reflecting quoted market rates for the same or similar instruments. The fair values of time deposits approximate their amortized cost due to the short maturities of these instruments. Available-for-sale equity securities consists of investments for which the fair values are determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company are valued using publicized spot curves for interest rate hedges and publicized forward curves for foreign currency contracts. | ||||||||||
Cumulative net unrealized holding gains on available-for-sale equity securities totaled $4 million and $3 million at March 31, 2015 and December 31, 2014, respectively. | ||||||||||
There have been no transfers of assets or liabilities between the fair value measurement levels. | ||||||||||
In addition to the financial instruments that the company is required to recognize at fair value on the 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 March 31, 2015 and December 31, 2014 are shown in the table below: | ||||||||||
Book values | Approximate fair values | |||||||||
(in millions) | March 31, | December 31, | March 31, | December 31, | ||||||
2015 | 2014 | 2015 | 2014 | |||||||
Assets | ||||||||||
Investments | $ | $ | $ | $ | ||||||
96 | 95 | 129 | 145 | |||||||
Liabilities | ||||||||||
Short-term borrowings | 569 | 425 | 569 | 425 | ||||||
Current portion of long-term debt and lease obligations | 4,021 | 4,021 | 4,029 | 4,033 | ||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,742 | 10,745 | 10,893 | 10,830 | ||||||
The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of March 31, 2015: | ||||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Fair value at | Quoted prices in active | Significant | Significant | ||||||
March 31, | markets for identical | other observable | unobservable | |||||||
2015 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Investments | $ | $ | $ | $ | ||||||
129 | 47 | 16 | 66 | |||||||
Total assets | $ | $ | $ | $ | ||||||
129 | 47 | 16 | 66 | |||||||
Liabilities | ||||||||||
Short-term borrowings | $ | $— | $ | $— | ||||||
569 | 569 | |||||||||
Current portion of long-term debt and lease obligations | 4,029 | 4,007 | 22 | — | ||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,893 | 10,803 | 90 | — | ||||||
Total liabilities | $ | $ | $ | $— | ||||||
15,491 | 14,810 | 681 | ||||||||
The following table summarizes the bases used to measure the approximate fair values of the financial instruments as of December 31, 2014: | ||||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Fair value at | Quoted prices in active | Significant | Significant | ||||||
December 31, | markets for identical | other observable | unobservable | |||||||
2014 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Investments | $ | $ | $ | $ | ||||||
145 | 68 | 13 | 64 | |||||||
Total assets | $ | $ | $ | $ | ||||||
145 | 68 | 13 | 64 | |||||||
Liabilities | ||||||||||
Short-term borrowings | $ | $— | $ | $— | ||||||
425 | 425 | |||||||||
Current portion of long-term debt and lease obligations | 4,033 | 4,012 | 21 | — | ||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,830 | 10,737 | 93 | — | ||||||
Total liabilities | $ | $ | $ | $— | ||||||
15,288 | 14,749 | 539 | ||||||||
Investments consist of cost method investments and held-to-maturity debt securities. Cost method investments include certain investments for which the fair value is determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. To determine the fair value of other cost method investments, the company takes into consideration recent transactions, as well as the financial information of the investee, which represents a Level 3 basis of fair value measurement. The fair values of held-to-maturity debt securities were estimated based upon the quoted market prices for the same or similar debt instruments. The fair values of short-term and current borrowings approximate the carrying values due to the short maturities of these instruments. | ||||||||||
The fair values of long-term debt, excluding fair value hedges, were determined by using the published market price for the debt instruments, without consideration of transaction costs, which represents a Level 1 basis of fair value measurement. The counterparties to financial instruments consist of select major international financial institutions. | ||||||||||
Concentrations of Risk | ||||||||||
The company invests excess cash in time deposits, money market funds and U.S. Treasury securities and diversifies the concentration of cash among different financial institutions. The company monitors concentrations of credit risk associated with deposits with financial institutions. Credit exposure limits have been established to limit a concentration with any single issuer or institution. | ||||||||||
At March 31, 2015, AbbVie had approximately $265 million of net monetary assets denominated in the Venezuelan bolivar (converted at a rate of 6.3 VEF/USD) in its Venezuelan entity, which had net sales of $46 million for the three months ended March 31, 2015. If AbbVie’s net monetary assets denominated in the Venezuelan bolivar had been converted at a rate of 12 VEF/USD at March 31, 2015, it would have resulted in a devaluation loss of $126 million for the three months ended March 31, 2015. The company cannot predict whether there will be further devaluations of the Venezuelan currency or whether the use of the official rate of 6.3 will continue to be supported by evolving facts and circumstances. If circumstances change such that the company concludes it would be appropriate to use a different rate, or if a devaluation of the official rate occurs, it could result in a significant change to AbbVie’s results of operations. | ||||||||||
Three U.S. wholesalers accounted for 48 percent and 49 percent of total net accounts receivable as of March 31, 2015 and December 31, 2014, respectively, and substantially all of AbbVie’s sales in the United States are to these three wholesalers. In addition, net governmental receivables outstanding in Greece, Portugal, Italy and Spain totaled $479 million at March 31, 2015 and $446 million at December 31, 2014. | ||||||||||
HUMIRA® (adalimumab) is AbbVie’s single largest product and accounted for approximately 62 percent and 58 percent of AbbVie’s total net sales in the three months ended March 31, 2015 and 2014, respectively. | ||||||||||
Debt and Credit Facilities | ||||||||||
Short-term borrowings include commercial paper borrowings of $569 million and $416 million as of March 31, 2015 and December 31, 2014, respectively. The weighted-average interest rate on outstanding commercial paper borrowings for the three months ended March 31, 2015 and 2014 was 0.3 percent and 0.2 percent, respectively. | ||||||||||
At March 31, 2015, AbbVie was in compliance with the financial covenants of its $3.0 billion unsecured credit facility. No amounts were outstanding under this facility as of March 31, 2015 and December 31, 2014. | ||||||||||
On March 27, 2015, in connection with the proposed acquisition of Pharmacyclics, AbbVie entered into the bridge loan. See Note 4 for additional information. | ||||||||||
PostEmployment_Benefits
Post-Employment Benefits | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Post-Employment Benefits | ||||||||||
Post-Employment Benefits | Note 8Post-Employment Benefits | |||||||||
The following is the summary of net periodic benefit costs relating to the company’s defined benefit and other post-employment plans: | ||||||||||
Defined | Other post- | |||||||||
benefit plans | employment plans | |||||||||
For the three months ended March 31 (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||
Service cost | $ | $ | $ | $ | ||||||
58 | 43 | 6 | 5 | |||||||
Interest cost | 56 | 55 | 6 | 6 | ||||||
Expected return on plan assets | (81 | ) | (75 | ) | — | — | ||||
Amortization of actuarial losses (gains) and prior service costs | 34 | 17 | 1 | (1 | ) | |||||
Net periodic benefit cost | $ | $ | $ | $ | ||||||
67 | 40 | 13 | 10 | |||||||
AbbVie made voluntary contributions of $150 million in the three months ended March 31, 2015 and $370 million in the three months ended March 31, 2014 to its main domestic defined benefit pension plan. | ||||||||||
Equity
Equity | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Equity | ||||||||||||
Equity | Note 9Equity | |||||||||||
Stock-Based Compensation | ||||||||||||
Stock-based compensation expense was $119 million and $106 million for the three months ended March 31, 2015 and 2014, respectively, and is principally classified in SG&A expense with the remainder classified in R&D expense and cost of products sold. | ||||||||||||
Prior to separation, AbbVie employees participated in Abbott’s incentive stock program. The AbbVie 2013 Incentive Stock Program, adopted at the time of separation, facilitated the assumption of certain awards granted under Abbott’s incentive stock program and authorizes the post-separation grant of several different forms of benefits, including nonqualified stock options, RSAs, RSUs and performance-based RSAs and RSUs. | ||||||||||||
In connection with the separation, outstanding Abbott employee stock options, RSAs and RSUs previously issued under Abbott’s incentive stock program, were adjusted and converted into new Abbott and AbbVie stock-based awards using a formula designed to preserve the intrinsic value and fair value of the awards immediately prior to the separation. Upon the separation on January 1, 2013, holders of Abbott stock options, RSAs and RSUs, generally received one AbbVie stock-based award for each Abbott stock-based award outstanding. These adjusted awards retained the vesting schedule and expiration date of the original awards. No awards have been granted to Abbott employees other than in connection with the separation. | ||||||||||||
Stock Options | ||||||||||||
The exercise price for options granted is equal to at least 100 percent of the market value on the date of grant. Stock options typically have a contractual term of 10 years and generally vest in one-third increments over a three-year period. | ||||||||||||
The fair value of stock options is determined using the Black-Scholes model. The weighted-average grant-date fair values of the stock options granted during the three months ended March 31, 2015 and 2014 were $9.96 and $9.83, respectively. Stock-based compensation expense attributable to options during each of the periods presented was not material. | ||||||||||||
The following table summarizes AbbVie stock option activity for both AbbVie and Abbott employees for the three months ended March 31, 2015: | ||||||||||||
(options in thousands, aggregate intrinsic value in millions) | Options | Weighted- | Weighted- | Aggregate | ||||||||
average | average | intrinsic value | ||||||||||
exercise price | remaining life | |||||||||||
(in years) | ||||||||||||
Outstanding at December 31, 2014 | 28,280 | $ | 3.3 | $ | ||||||||
28.53 | 1,044 | |||||||||||
Granted | 1,205 | 58.88 | ||||||||||
Exercised | (2,356 | ) | 25.03 | |||||||||
Lapsed | (34 | ) | 25.92 | |||||||||
Outstanding at March 31, 2015 | 27,095 | 30.19 | 3.6 | $ | ||||||||
768 | ||||||||||||
Exercisable at March 31, 2015 | 24,579 | $ | 3 | $ | ||||||||
27.99 | 751 | |||||||||||
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 three months ended March 31, 2015. The total intrinsic value of options exercised was $83 million and $72 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
As of March 31, 2015, $8 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 activity (including performance-based awards) for both AbbVie and Abbott employees for the three months ended March 31, 2015: | ||||||||||||
(share units in thousands) | Share units | Weighted-average | ||||||||||
grant date fair value | ||||||||||||
Outstanding at December 31, 2014 | 12,815 | $ | ||||||||||
40.98 | ||||||||||||
Granted | 4,336 | 58.89 | ||||||||||
Vested | (5,293 | ) | 36.99 | |||||||||
Lapsed | (155 | ) | 44.42 | |||||||||
Outstanding at March 31, 2015 | 11,703 | $ | ||||||||||
49.37 | ||||||||||||
The weighted-average grant date fair value per share of RSAs and RSUs (including performance-based awards) is determined based on the number of shares granted and the quoted price of the company’s common stock on the date of the grant. The fair market value of RSAs and RSUs vested was $310 million and $314 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
As of March 31, 2015, $303 million of unrecognized compensation cost related to RSAs and RSUs is expected to be recognized as expense over approximately the next two years. | ||||||||||||
Cash Dividends | ||||||||||||
On February 19, 2015, the board of directors declared a quarterly cash dividend of $0.51 per share, which represents an increase of approximately 4 percent over the previous quarterly rate of $0.49 per share. The dividend is payable May 15, 2015 to stockholders of record at the close of business on April 15, 2015. Additionally, the quarterly cash dividend declared by the board of directors on October 20, 2014 of $0.49 per share of common stock, which represented an increase of nearly 17 percent over the previous quarterly rate of $0.42 per share, for stockholders of record on January 15, 2015 was paid on February 13, 2015. | ||||||||||||
On February 14 and May 15, 2014, AbbVie paid quarterly cash dividends of $0.40 and $0.42 per share of common stock, respectively, which were declared by the board of directors on December 12, 2013 and February 20, 2014, respectively. | ||||||||||||
Stock Repurchase Program | ||||||||||||
On February 15, 2013, AbbVie’s board of directors authorized a $1.5 billion stock repurchase program. On October 20, 2014, AbbVie’s board of directors authorized a new $5.0 billion stock repurchase program, which was effective immediately and superseded the previous authorization. This program is expected to be executed over the next several years. The stock repurchase authorization permits purchases of AbbVie shares from time to time in open market or private transactions at management’s direction depending on the company’s cash flows, net debt level and market conditions. The program has no time limit and can be discontinued at any time. In March 2015, the board of directors authorized a $5.0 billion increase to the existing stock repurchase program. This increase will support AbbVie’s intention to execute an accelerated share repurchase program to repurchase at least half of the equity issued in connection with the proposed acquisition of Pharmacyclics. | ||||||||||||
Under these programs, AbbVie repurchased approximately 4 million shares for $250 million in the open market during the three months ended March 31, 2015 and approximately 5 million shares for $250 million in the open market during the three months ended March 31, 2014. Shares repurchased under this program are recorded at acquisition cost, including related expenses, and are available for general corporate purposes. AbbVie’s remaining stock repurchase authorization was $9.4 billion as of March 31, 2015. | ||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||
The following table summarizes the changes in balances of each component of accumulated other comprehensive loss, net of tax for the three months ended March 31, 2015: | ||||||||||||
(in millions) (brackets denote losses) | Foreign | Pension | Unrealized | Hedging | Total | |||||||
currency | and post- | gains on | activities | |||||||||
translation | employment | marketable | ||||||||||
adjustments | benefits | equity | ||||||||||
securities | ||||||||||||
Balance as of December 31, 2014 | $ | ) | $ | ) | $ | $ | $ | ) | ||||
(603 | (1,608 | 3 | 177 | (2,031 | ||||||||
Other comprehensive (loss) income before reclassifications | (549 | ) | 30 | 1 | 87 | (431 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | — | 25 | — | (30 | ) | (5 | ) | |||||
Net current-period other comprehensive (loss) income | (549 | ) | 55 | 1 | 57 | (436 | ) | |||||
Balance as of March 31, 2015 | $ | ) | $ | ) | $ | $ | $ | ) | ||||
(1,152 | (1,553 | 4 | 234 | (2,467 | ||||||||
Other comprehensive loss for the three months ended March 31, 2015 includes foreign currency translation adjustments totaling a loss of $549 million, which was principally driven by the impact of the continued weakening of the Euro in the three months ended March 31, 2015 on the translation of the company’s Euro-denominated assets. | ||||||||||||
The following table summarizes the changes in balances of each component of accumulated other comprehensive loss, net of tax for the three months ended March 31, 2014: | ||||||||||||
(in millions) (brackets denote losses) | Foreign | Pension | Unrealized | Hedging | Total | |||||||
currency | and post- | gains on | activities | |||||||||
translation | employment | marketable | ||||||||||
adjustments | benefits | equity | ||||||||||
securities | ||||||||||||
Balance as of December 31, 2013 | $ | $ | ) | $ | $ | ) | $ | ) | ||||
470 | (827 | 2 | (87 | (442 | ||||||||
Other comprehensive (loss) income before reclassifications | (29 | ) | — | — | 21 | (8 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | — | 12 | — | 12 | 24 | |||||||
Net current-period other comprehensive (loss) income | (29 | ) | 12 | — | 33 | 16 | ||||||
Balance as of March 31, 2014 | $ | $ | ) | $ | $ | ) | $ | ) | ||||
441 | (815 | 2 | (54 | (426 | ||||||||
The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the three months ended March 31, 2015 and 2014: | ||||||||||||
Three months ended March 31, | ||||||||||||
(in millions) (brackets denote losses) | 2015 | 2014 | ||||||||||
Pension and post-employment benefits | ||||||||||||
Amortization of actuarial losses and other (a) | $ | $ | ||||||||||
35 | 16 | |||||||||||
Less tax benefit | (10 | ) | (4 | ) | ||||||||
Total reclassification, net of tax | $ | $ | ||||||||||
25 | 12 | |||||||||||
Hedging activities | ||||||||||||
(Gains) losses on designated cash flow hedges (b) | $ | ) | $ | |||||||||
(31 | 12 | |||||||||||
Less tax expense | 1 | — | ||||||||||
Total reclassification, net of tax | $ | ) | $ | |||||||||
(30 | 12 | |||||||||||
(a) Amounts are included in the computation of net periodic benefit cost (see Note 8). | ||||||||||||
(b) Amounts are included in cost of products sold (see Note 7). | ||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 10Income Taxes |
The effective tax rate was 27 percent and 24 percent for the three months ended March 31, 2015 and 2014, respectively. The effective tax rate in each period differs from the statutory tax rate of 35 percent primarily due to the benefit from foreign operations which reflects the impact of lower statutory tax rates in locations outside the United States, tax exemptions and incentives in Puerto Rico and other foreign tax jurisdictions, and business development activities together with the cost of repatriation decisions. The increase in the effective tax rate for the three months ended March 31, 2015 over the prior year was principally due to changes in the jurisdictional mix of earnings, as well as certain discrete factors and events, including acquisitions and collaborations. | |
Due to the potential for resolution of federal, state, and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that the company’s gross unrecognized tax benefits balance may change within the next twelve months up to $21 million. AbbVie and Abbott entered into a tax sharing agreement effective on the date of separation, which provides that Abbott is liable for and has indemnified AbbVie against all income tax liabilities for periods prior to the separation. Accordingly, 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. | |
Legal_Proceedings_and_Continge
Legal Proceedings and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Legal Proceedings and Contingencies | |
Legal Proceedings and Contingencies | Note 11Legal Proceedings and Contingencies |
AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation at March 31, 2015 and December 31, 2014 was not significant. Within the next year, initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows. | |
Subject to certain exceptions specified in the separation agreement by and between Abbott and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters. | |
Several pending lawsuits filed against Unimed Pharmaceuticals, Inc., Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) and others were consolidated for pre-trial purposes in the United States District Court for the Northern District of Georgia under the Multi-District Litigation Rules as In re AndroGel Antitrust Litigation, MDL No. 2084. These cases, brought by private plaintiffs and the Federal Trade Commission (FTC), generally allege Solvay’s 2006 patent litigation involving AndroGel was sham litigation and the patent litigation settlement agreement and related agreements with three generic companies violate federal and state antitrust laws and state consumer protection and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys’ fees. MDL 2084 includes: (a) three individual plaintiff lawsuits; (b) seven purported class actions; and (c) Federal Trade Commission v. Watson Pharmaceuticals, Inc. et al., filed in May 2009 in the United States District Court for the Northern District of Georgia. The Attorney General of the State of Alaska also has served AbbVie with a Civil Investigative Demand, primarily seeking documents that AbbVie produced in these lawsuits. Following the district court’s dismissal of all plaintiffs’ claims, appellate proceedings led to the reinstatement of the claims regarding the patent litigation settlement, which are proceeding in discovery in the district court. | |
In November 2007, GlaxoSmithKline plc filed a lawsuit against Abbott Laboratories in the United States District Court for the Northern District of California alleging that Abbott violated antitrust laws in connection with the 2003 Norvir re-pricing. In March 2011, a jury found that Abbott did not violate antitrust laws, but breached its license agreement with the plaintiff. In January 2014, a 3-judge panel of the United States Court of Appeals for the Ninth Circuit reversed this verdict and remanded the case for a new trial due to the alleged improper exclusion of a potential juror. The case has been returned to the trial court for further proceedings. AbbVie assumed the liability for and control of this proceeding in connection with its separation from Abbott. | |
In August 2013, a putative class action lawsuit, Sidney Hillman Health Center of Rochester, et al. v. AbbVie Inc., et al., was filed against AbbVie in the United States District Court for the Northern District of Illinois by three healthcare benefit providers alleging violations of federal Racketeer Influenced and Corrupt Organizations (RICO) statutes and state deceptive business practice and unjust enrichment laws in connection with reimbursements for certain uses of Depakote from 1998 to 2012. Plaintiffs seek monetary damages and/or equitable relief and attorneys’ fees. In April 2015, the United States Court of Appeals for the Seventh Circuit reversed the district court’s decision to dismiss all of the plaintiffs’ claims with prejudice on statute of limitations grounds. The case will return to the district court for further proceedings. | |
Lawsuits have been filed against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan® entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott Laboratories in 2006 and presently a subsidiary of AbbVie) and a generic company violates federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys’ fees. In September 2013, all of these pending putative class action lawsuits were centralized for consolidated or coordinated pre-trial proceedings in the United States District Court for the Eastern District of Pennsylvania under the Multi-District Litigation Rules as In re Niaspan Antitrust Litigation, MDL No. 2460. The office of the Attorney General of the State of Alaska also has served AbbVie with a Civil Investigative Demand, primarily seeking documents that AbbVie produced in this lawsuit. | |
In September 2014, the FTC filed suit in the United States District Court for the Eastern District of Pennsylvania against AbbVie and others, alleging that 2011 patent litigation with two generic companies regarding AndroGel® was sham litigation and the patent litigation settlement with one of those generic companies violates federal antitrust laws. The FTC’s complaint seeks monetary damages and injunctive relief. The office of the Attorney General of the State of Alaska also has served AbbVie with a Civil Investigative Demand, primarily seeking documents that AbbVie produced in this lawsuit. | |
In November 2014, five individuals filed a putative class action lawsuit on behalf of purchasers and sellers of certain Shire plc securities between June 20 and October 14, 2014, against AbbVie and its chief executive officer in the United States District Court for the Northern District of Illinois alleging that the defendants made and/or are responsible for material misstatements in violation of federal securities laws in connection with AbbVie’s proposed transaction with Shire. The complaint seeks unspecified monetary damages and injunctive relief. | |
In November 2014, a putative class action lawsuit, Medical Mutual of Ohio v. AbbVie Inc., et al., was filed against several manufacturers of testosterone replacement therapies (TRTs), including AbbVie, in the United States District Court for the Northern District of Illinois on behalf of all insurance companies, health benefit providers, and other third-party payors who paid for TRTs, including AndroGel. The claims asserted include violations of the federal RICO Act and state consumer fraud and deceptive trade practices laws. The complaint seeks unspecified monetary and injunctive relief. | |
In December 2014, a shareholder derivative lawsuit, Plumbers & Steamfitters Local 60 Pension Plans v. J.P. Morgan Securities LLC, et al., was filed in Delaware Chancery Court, alleging that AbbVie’s directors breached their fiduciary duties in connection with the Shire transaction approval and termination. The lawsuit seeks unspecified compensatory damages for AbbVie, among other relief. | |
In March 2015, the State of Louisiana filed a lawsuit, State of Louisiana v. Fournier Industrie et Sante, et al., against AbbVie, Abbott Laboratories and affiliated Abbott entities in Louisiana state court. Plaintiff alleges that patent applications and patent litigation filed and other alleged conduct from the early 2000’s and before related to the drug TriCor violated Louisiana state antitrust and unfair trade practices laws. The lawsuit seeks unspecified monetary relief and attorneys’ fees. | |
AbbVie is seeking to enforce its patent rights relating to testosterone gel (a drug AbbVie sells under the trademark AndroGel® 1.62%). In a case filed in the United States District Court for the District of Delaware in February 2013, AbbVie alleges that Perrigo Company’s and Perrigo Israel Pharmaceutical Ltd.’s proposed generic product infringes AbbVie’s patents and seeks declaratory and injunctive relief. | |
AbbVie is seeking to enforce its patent rights relating to ritonavir/lopinavir tablets (a drug AbbVie sells under the trademark Kaletra®). In a case filed in the United States District Court for the Northern District of Illinois in March 2009, AbbVie alleges that Matrix Laboratories, Inc.’s, Matrix Laboratories, Ltd.’s, and Mylan, Inc.’s proposed generic products infringe AbbVie’s patents and seeks declaratory and injunctive relief. Upon Matrix’s motion in November 2009, the court granted a five-year stay of the litigation unless good cause to lift the stay is shown. On July 1, 2014, the stay was lifted pursuant to the original terms of the court order entered in 2009. In February 2015, in a related case filed in the United States District Court for the Northern District of Illinois, AbbVie alleges that Mylan Pharmaceuticals Inc.’s, Mylan Laboratories, Ltd.’s and Mylan Laboratories, Inc.’s proposed generic lopinavir/ritonavir products infringe additional AbbVie patents and seeks declaratory and injunctive relief. | |
AbbVie is seeking to enforce its patent rights relating to ritonavir tablets (a drug AbbVie sells under the trademark Norvir®). In a case filed in the United States District Court for the District of Delaware in October 2014, AbbVie alleges that Mylan Pharmaceutical Inc.’s proposed generic ritonavir tablets product infringes AbbVie’s patents and seeks declaratory and injunctive relief. | |
Segment_Information
Segment Information | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Segment Information | |||||
Segment Information | Note 12Segment Information | ||||
AbbVie operates in one business segment—pharmaceutical products. Substantially all of AbbVie’s sales in the United States are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served. Worldwide net sales of key products were as follows: | |||||
Three months ended | |||||
March 31, | |||||
(in millions) | 2015 | 2014 | |||
HUMIRA | $ | $ | |||
3,111 | 2,637 | ||||
Synagis | 335 | 354 | |||
VIEKIRA | 231 | — | |||
Lupron | 192 | 189 | |||
Synthroid | 186 | 157 | |||
Kaletra | 180 | 195 | |||
AndroGel | 153 | 254 | |||
Creon | 127 | 107 | |||
Sevoflurane | 126 | 142 | |||
Duodopa | 53 | 52 | |||
Dyslipidemia products | 43 | 96 | |||
All other | 303 | 380 | |||
Net sales | $ | $ | |||
5,040 | 4,563 | ||||
Supplemental_Financial_Informa1
Supplemental Financial Information (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Supplemental Financial Information | ||||||
Schedule of interest expense, net | ||||||
Three months ended | ||||||
March 31, | ||||||
(in millions) | 2015 | 2014 | ||||
Interest expense | $ | $ | ||||
132 | 70 | |||||
Interest income | (6 | ) | (5 | ) | ||
Interest expense, net | $ | $ | ||||
126 | 65 | |||||
Schedule of inventories, net | (in millions) | March 31, | December 31, | |||
2015 | 2014 | |||||
Finished goods | $ | $ | ||||
291 | 341 | |||||
Work-in-process | 568 | 629 | ||||
Raw materials | 163 | 154 | ||||
Inventories, net | $ | $ | ||||
1,022 | 1,124 | |||||
Schedule of property and equipment, net | (in millions) | March 31, | December 31, | |||
2015 | 2014 | |||||
Property and equipment, gross | $ | $ | ||||
6,988 | 7,105 | |||||
Less accumulated depreciation | (4,557 | ) | (4,620 | ) | ||
Property and equipment, net | $ | $ | ||||
2,431 | 2,485 | |||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||
Schedule of intangible assets | March 31, 2015 | December 31, 2014 | ||||||||||||
(in millions) | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||
carrying | amortization | carrying | carrying | amortization | carrying | |||||||||
amount | amount | amount | amount | |||||||||||
Definite-lived intangible assets | ||||||||||||||
Developed product rights | $ | $ | ) | $ | $ | $ | ) | $ | ||||||
4,526 | (3,742 | 784 | 4,546 | (3,706 | 840 | |||||||||
License agreements | 1,176 | (889 | ) | 287 | 1,097 | (869 | ) | 228 | ||||||
Total definite-lived intangible assets | 5,702 | (4,631 | ) | 1,071 | 5,643 | (4,575 | ) | 1,068 | ||||||
Indefinite-lived research and development | 407 | — | 407 | 445 | — | 445 | ||||||||
Total intangible assets, net | $ | $ | ) | $ | $ | $ | ) | $ | ||||||
6,109 | (4,631 | 1,478 | 6,088 | (4,575 | 1,513 | |||||||||
Restructuring_Plans_Tables
Restructuring Plans (Tables) (Restructuring Plan 2014 and Prior Years) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Restructuring Plan 2014 and Prior Years | ||||
Restructuring Plans | ||||
Summary of the cash activity in the restructuring reserve | (in millions) | |||
Accrued balance at December 31, 2014 | $ | |||
122 | ||||
2015 restructuring charges | 9 | |||
Payments and other adjustments | (12 | ) | ||
Accrued balance at March 31, 2015 | $ | |||
119 | ||||
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measures (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
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 March 31, 2015: | ||||||||||
Fair value – | Fair value – | |||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||
(in millions) | Balance sheet caption | Amount | Balance sheet caption | Amount | ||||||
Foreign currency forward exchange contracts — | ||||||||||
Hedging instruments | Prepaid expenses and other | $ | Accounts payable and accrued liabilities | $— | ||||||
149 | ||||||||||
Others not designated as hedges | Prepaid expenses and other | 50 | Accounts payable and accrued liabilities | 34 | ||||||
Interest rate swaps designated as fair value hedges | n/a | — | Long-term liabilities | 59 | ||||||
Total derivatives | $ | $ | ||||||||
199 | 93 | |||||||||
The following table summarizes the amounts and location of AbbVie’s derivative instruments as of December 31, 2014: | ||||||||||
Fair value — | Fair value — | |||||||||
Derivatives in asset position | Derivatives in liability position | |||||||||
(in millions) | Balance sheet caption | Amount | Balance sheet caption | Amount | ||||||
Foreign currency forward exchange contracts — | ||||||||||
Hedging instruments | Prepaid expenses and other | $ | Accounts payable and accrued liabilities | $— | ||||||
141 | ||||||||||
Others not designated as hedges | Prepaid expenses and other | 70 | Accounts payable and accrued liabilities | 63 | ||||||
Interest rate swaps designated as fair value hedges | n/a | — | Long-term liabilities | 180 | ||||||
Total derivatives | $ | $ | ||||||||
211 | 243 | |||||||||
Schedule of derivative activity and amounts and location of income (expense) and gain (loss) reclassified into net earnings | ||||||||||
Three months ended | ||||||||||
March 31, | ||||||||||
(in millions) | Income statement caption | 2015 | 2014 | |||||||
Foreign currency forward exchange contracts — | ||||||||||
Designated as cash flow hedges | Cost of products sold | $ | $ | ) | ||||||
31 | (12 | |||||||||
Not designated as hedges | Net foreign exchange loss | (169 | ) | (1 | ) | |||||
Interest rate swaps designated as fair value hedges | Interest expense, net | 121 | 86 | |||||||
Total | $ | ) | $ | |||||||
(17 | 73 | |||||||||
Summary of the bases used to measure certain assets and liabilities that are carried at fair value on a recurring basis in the condensed consolidated balance sheets | ||||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Balance at | Quoted prices in active | Significant | Significant | ||||||
March 31, | markets for identical | other observable | unobservable | |||||||
2015 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Cash and equivalents | $ | $ | $ | $— | ||||||
7,906 | 992 | 6,914 | ||||||||
Equity securities | 15 | 15 | — | — | ||||||
Foreign currency contracts | 199 | — | 199 | — | ||||||
Total assets | $ | $ | $ | $— | ||||||
8,120 | 1,007 | 7,113 | ||||||||
Liabilities | ||||||||||
Interest rate hedges | $ | $— | $ | $— | ||||||
59 | 59 | |||||||||
Foreign currency contracts | 34 | — | 34 | — | ||||||
Total liabilities | $ | $— | $ | $— | ||||||
93 | 93 | |||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Balance at | Quoted prices in active | Significant | Significant | ||||||
December 31, | markets for identical | other observable | unobservable | |||||||
2014 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Cash and equivalents | $ | $ | $ | $— | ||||||
8,348 | 1,214 | 7,134 | ||||||||
Time deposits | 9 | — | 9 | — | ||||||
Equity securities | 13 | 13 | — | — | ||||||
Foreign currency contracts | 211 | — | 211 | — | ||||||
Total assets | $ | $ | $ | $— | ||||||
8,581 | 1,227 | 7,354 | ||||||||
Liabilities | ||||||||||
Interest rate hedges | $ | $— | $ | $— | ||||||
180 | 180 | |||||||||
Foreign currency contracts | 63 | — | 63 | — | ||||||
Total liabilities | $ | $— | $ | $— | ||||||
243 | 243 | |||||||||
Schedule of the carrying values and fair values of certain financial instruments | Book values | Approximate fair values | ||||||||
(in millions) | March 31, | December 31, | March 31, | December 31, | ||||||
2015 | 2014 | 2015 | 2014 | |||||||
Assets | ||||||||||
Investments | $ | $ | $ | $ | ||||||
96 | 95 | 129 | 145 | |||||||
Liabilities | ||||||||||
Short-term borrowings | 569 | 425 | 569 | 425 | ||||||
Current portion of long-term debt and lease obligations | 4,021 | 4,021 | 4,029 | 4,033 | ||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,742 | 10,745 | 10,893 | 10,830 | ||||||
Schedule of fair value of financial instruments by fair value basis | ||||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Fair value at | Quoted prices in active | Significant | Significant | ||||||
March 31, | markets for identical | other observable | unobservable | |||||||
2015 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Investments | $ | $ | $ | $ | ||||||
129 | 47 | 16 | 66 | |||||||
Total assets | $ | $ | $ | $ | ||||||
129 | 47 | 16 | 66 | |||||||
Liabilities | ||||||||||
Short-term borrowings | $ | $— | $ | $— | ||||||
569 | 569 | |||||||||
Current portion of long-term debt and lease obligations | 4,029 | 4,007 | 22 | — | ||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,893 | 10,803 | 90 | — | ||||||
Total liabilities | $ | $ | $ | $— | ||||||
15,491 | 14,810 | 681 | ||||||||
Basis of fair value measurement | ||||||||||
(in millions) | Fair value at | Quoted prices in active | Significant | Significant | ||||||
December 31, | markets for identical | other observable | unobservable | |||||||
2014 | assets | inputs | inputs | |||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||
Assets | ||||||||||
Investments | $ | $ | $ | $ | ||||||
145 | 68 | 13 | 64 | |||||||
Total assets | $ | $ | $ | $ | ||||||
145 | 68 | 13 | 64 | |||||||
Liabilities | ||||||||||
Short-term borrowings | $ | $— | $ | $— | ||||||
425 | 425 | |||||||||
Current portion of long-term debt and lease obligations | 4,033 | 4,012 | 21 | — | ||||||
Long-term debt and lease obligations, excluding fair value hedges | 10,830 | 10,737 | 93 | — | ||||||
Total liabilities | $ | $ | $ | $— | ||||||
15,288 | 14,749 | 539 | ||||||||
PostEmployment_Benefits_Tables
Post-Employment Benefits (Tables) (AbbVie sponsored plans) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
AbbVie sponsored plans | ||||||||||
Employee Benefit Plans | ||||||||||
Summary of net periodic benefit cost relating to the company's defined benefit and other post-employment plans | ||||||||||
Defined | Other post- | |||||||||
benefit plans | employment plans | |||||||||
For the three months ended March 31 (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||
Service cost | $ | $ | $ | $ | ||||||
58 | 43 | 6 | 5 | |||||||
Interest cost | 56 | 55 | 6 | 6 | ||||||
Expected return on plan assets | (81 | ) | (75 | ) | — | — | ||||
Amortization of actuarial losses (gains) and prior service costs | 34 | 17 | 1 | (1 | ) | |||||
Net periodic benefit cost | $ | $ | $ | $ | ||||||
67 | 40 | 13 | 10 | |||||||
Equity_Tables
Equity (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Equity | ||||||||||||
Summary of AbbVie stock option activity for both AbbVie and Abbott employees | (options in thousands, aggregate intrinsic value in millions) | Options | Weighted- | Weighted- | Aggregate | |||||||
average | average | intrinsic value | ||||||||||
exercise price | remaining life | |||||||||||
(in years) | ||||||||||||
Outstanding at December 31, 2014 | 28,280 | $ | 3.3 | $ | ||||||||
28.53 | 1,044 | |||||||||||
Granted | 1,205 | 58.88 | ||||||||||
Exercised | (2,356 | ) | 25.03 | |||||||||
Lapsed | (34 | ) | 25.92 | |||||||||
Outstanding at March 31, 2015 | 27,095 | 30.19 | 3.6 | $ | ||||||||
768 | ||||||||||||
Exercisable at March 31, 2015 | 24,579 | $ | 3 | $ | ||||||||
27.99 | 751 | |||||||||||
Summary of AbbVie RSA and RSU activity (including performance-based awards) for both AbbVie and Abbott employees | (share units in thousands) | Share units | Weighted-average | |||||||||
grant date fair value | ||||||||||||
Outstanding at December 31, 2014 | 12,815 | $ | ||||||||||
40.98 | ||||||||||||
Granted | 4,336 | 58.89 | ||||||||||
Vested | (5,293 | ) | 36.99 | |||||||||
Lapsed | (155 | ) | 44.42 | |||||||||
Outstanding at March 31, 2015 | 11,703 | $ | ||||||||||
49.37 | ||||||||||||
Summary of changes in balances of each component of accumulated other comprehensive loss | (in millions) (brackets denote losses) | Foreign | Pension | Unrealized | Hedging | Total | ||||||
currency | and post- | gains on | activities | |||||||||
translation | employment | marketable | ||||||||||
adjustments | benefits | equity | ||||||||||
securities | ||||||||||||
Balance as of December 31, 2014 | $ | ) | $ | ) | $ | $ | $ | ) | ||||
(603 | (1,608 | 3 | 177 | (2,031 | ||||||||
Other comprehensive (loss) income before reclassifications | (549 | ) | 30 | 1 | 87 | (431 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | — | 25 | — | (30 | ) | (5 | ) | |||||
Net current-period other comprehensive (loss) income | (549 | ) | 55 | 1 | 57 | (436 | ) | |||||
Balance as of March 31, 2015 | $ | ) | $ | ) | $ | $ | $ | ) | ||||
(1,152 | (1,553 | 4 | 234 | (2,467 | ||||||||
(in millions) (brackets denote losses) | Foreign | Pension | Unrealized | Hedging | Total | |||||||
currency | and post- | gains on | activities | |||||||||
translation | employment | marketable | ||||||||||
adjustments | benefits | equity | ||||||||||
securities | ||||||||||||
Balance as of December 31, 2013 | $ | $ | ) | $ | $ | ) | $ | ) | ||||
470 | (827 | 2 | (87 | (442 | ||||||||
Other comprehensive (loss) income before reclassifications | (29 | ) | — | — | 21 | (8 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss | — | 12 | — | 12 | 24 | |||||||
Net current-period other comprehensive (loss) income | (29 | ) | 12 | — | 33 | 16 | ||||||
Balance as of March 31, 2014 | $ | $ | ) | $ | $ | ) | $ | ) | ||||
441 | (815 | 2 | (54 | (426 | ||||||||
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive loss | ||||||||||||
Three months ended March 31, | ||||||||||||
(in millions) (brackets denote losses) | 2015 | 2014 | ||||||||||
Pension and post-employment benefits | ||||||||||||
Amortization of actuarial losses and other (a) | $ | $ | ||||||||||
35 | 16 | |||||||||||
Less tax benefit | (10 | ) | (4 | ) | ||||||||
Total reclassification, net of tax | $ | $ | ||||||||||
25 | 12 | |||||||||||
Hedging activities | ||||||||||||
(Gains) losses on designated cash flow hedges (b) | $ | ) | $ | |||||||||
(31 | 12 | |||||||||||
Less tax expense | 1 | — | ||||||||||
Total reclassification, net of tax | $ | ) | $ | |||||||||
(30 | 12 | |||||||||||
(a) Amounts are included in the computation of net periodic benefit cost (see Note 8). | ||||||||||||
(b) Amounts are included in cost of products sold (see Note 7). | ||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Segment Information | |||||
Schedule of consolidated financial information by segment | Three months ended | ||||
March 31, | |||||
(in millions) | 2015 | 2014 | |||
HUMIRA | $ | $ | |||
3,111 | 2,637 | ||||
Synagis | 335 | 354 | |||
VIEKIRA | 231 | — | |||
Lupron | 192 | 189 | |||
Synthroid | 186 | 157 | |||
Kaletra | 180 | 195 | |||
AndroGel | 153 | 254 | |||
Creon | 127 | 107 | |||
Sevoflurane | 126 | 142 | |||
Duodopa | 53 | 52 | |||
Dyslipidemia products | 43 | 96 | |||
All other | 303 | 380 | |||
Net sales | $ | $ | |||
5,040 | 4,563 | ||||
Background_and_Basis_of_Presen1
Background and Basis of Presentation (Details) (USD $) | 3 Months Ended | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 02, 2013 | Dec. 31, 2014 |
customer | ||||
Background and Basis of Presentation | ||||
Number of wholesalers | 3 | |||
Separation-related expenses | $104 | $80 | ||
AbbVie sponsored plans | ||||
Background and Basis of Presentation | ||||
Percentage of outstanding common stock distributed to Abbott Laboratories' shareholders | 100.00% | |||
Abbott | Separation agreement | ||||
Operations and assets (net of liabilities) on which legal transfer of did not occur with the separation of the entity | ||||
Net sales | $49 |
Supplemental_Financial_Informa2
Supplemental Financial Information (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Interest Expense, net | |||
Interest expense | $132 | $70 | |
Interest income | -6 | -5 | |
Interest expense, net | 126 | 65 | |
Inventories, Net | |||
Finished goods | 291 | 341 | |
Work-in-process | 568 | 629 | |
Raw materials | 163 | 154 | |
Inventories, net | 1,022 | 1,124 | |
Property and Equipment, Net | |||
Property and equipment, gross | 6,988 | 7,105 | |
Less accumulated depreciation | -4,557 | -4,620 | |
Property and equipment, net | 2,431 | 2,485 | |
Depreciation expense | 90 | 89 | |
Pharmacyclics Inc | |||
Interest Expense, net | |||
Interest expense, net | $59 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Anti-dilutive securities excluded from the computation of earnings per common share | ||
Earnings allocable to participating securities (in dollars) | $5 | $4 |
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) | 3 | 4 |
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) | 0.5 | 1 |
Acquisitions_Collaborations_an1
Acquisitions, Collaborations and Other Arrangements (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |
Mar. 31, 2015 | Mar. 27, 2015 | Jun. 30, 2015 | Mar. 04, 2015 | |
Acquisitions | ||||
Cash outflows related to acquisitions, collaborations and other arrangements | $736,000,000 | |||
Acquired in-process research and development | 127,000,000 | |||
Collaborations and Other Arrangements | ||||
Financing cost recorded in interest expense | 59,000,000 | |||
Calico Life Sciences LLC | ||||
Acquisitions | ||||
Cash outflows related to acquisitions, collaborations and other arrangements | 500,000,000 | |||
C2N Diagnostics | ||||
Acquisitions | ||||
Additional contribution | 685,000,000 | |||
Term loan facility | Bridge Term Loan Agreement | ||||
Collaborations and Other Arrangements | ||||
Debt term | 364 days | |||
Drawn amount | 0 | |||
Maximum borrowing of term loan facility | 18,000,000,000 | |||
IPR&D | ||||
Acquisitions | ||||
Acquired in-process research and development | 127,000,000 | |||
IPR&D | C2N Diagnostics | ||||
Acquisitions | ||||
Initial upfront payment | 100,000,000 | |||
Subsequent event | Forecast | Senior notes | ||||
Collaborations and Other Arrangements | ||||
Debt face amount | 17,000,000,000 | |||
Pharmacyclics Inc | ||||
Collaborations and Other Arrangements | ||||
Purchase price (in dollars per share) | $261.25 | |||
Percentage of cash consideration | 58.00% | |||
Percentage of share consideration | 42.00% | |||
Pharmacyclics Inc | Scenario One | ||||
Collaborations and Other Arrangements | ||||
Purchase price payment partly in cash (in dollars per share) | $152.25 | |||
Purchase price payment partly in fair market value of shares of acquirer's common stock (in dollars per share) | $109 | |||
Pharmacyclics Inc | Scenario Two | ||||
Collaborations and Other Arrangements | ||||
Purchase price payment fully in cash (in dollars per share) | $261.25 | |||
Pharmacyclics Inc | Scenario Three | ||||
Collaborations and Other Arrangements | ||||
Purchase price payment fully in fair market value of shares of acquirer's common stock (in dollars per share) | $261.25 | |||
Pharmacyclics Inc | Subsequent event | Forecast | ||||
Collaborations and Other Arrangements | ||||
Aggregate purchase price | $21,000,000,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Goodwill | |||
Carrying amount of goodwill | $5,534 | $5,862 | |
Accumulated goodwill impairment losses | 0 | ||
Definite-lived intangible assets | |||
Gross carrying amount | 5,702 | 5,643 | |
Accumulated amortization | -4,631 | -4,575 | |
Net carrying amount | 1,071 | 1,068 | |
Indefinite-lived research and development | 407 | 445 | |
Net carrying amount - Indefinite-lived research and development | 407 | 445 | |
Total intangible assets gross carrying amount | 6,109 | 6,088 | |
Accumulated amortization - Total intangible assets | -4,631 | -4,575 | |
Total intangible assets | 1,478 | 1,513 | |
Amortization of intangible assets | 68 | 110 | |
Impairment charges | 0 | 0 | |
Developed product rights | |||
Definite-lived intangible assets | |||
Gross carrying amount | 4,526 | 4,546 | |
Accumulated amortization | -3,742 | -3,706 | |
Net carrying amount | 784 | 840 | |
License agreements | |||
Definite-lived intangible assets | |||
Gross carrying amount | 1,176 | 1,097 | |
Accumulated amortization | -889 | -869 | |
Net carrying amount | $287 | $228 |
Restructuring_Plans_Details
Restructuring Plans (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Restructuring Plans | |
Restructuring charges | $9 |
Restructuring reserve activity | |
Accrued balance beginning of the period | 122 |
Restructuring Charges | 9 |
Payments and other adjustments | -12 |
Accrued balance end of the period | 119 |
Cost of goods sold | Restructuring Plan 2014 and Prior Years | |
Restructuring Plans | |
Restructuring charges | 9 |
Restructuring reserve activity | |
Restructuring Charges | $9 |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measures (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Financial Instruments and Fair Value Measures | ||
Number of outstanding derivative instruments containing credit risk contingent features | 0 | |
Derivative instruments, notional amount and fair value | ||
Derivatives in asset position | $199 | $211 |
Derivatives in liability position | 93 | 243 |
Interest rate contracts | Fair value hedges | Long-term liabilities | ||
Derivative instruments, notional amount and fair value | ||
Derivatives in liability position | 59 | 180 |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | ||
Derivative instruments, notional amount and fair value | ||
Notional amount of derivative instruments | 8,000 | 8,000 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | ||
Derivative instruments, notional amount and fair value | ||
Derivatives in asset position | 149 | 141 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges | ||
Derivative instruments, notional amount and fair value | ||
Notional amount of derivative instruments | 915 | 1,400 |
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 | 5,000 | 6,800 |
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 | 50 | 70 |
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 | $34 | $63 |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value Measures (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Gain (loss) on derivatives | ||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | ($17) | $73 |
Cash flow hedges | Designated as hedging instrument | ||
Gain (loss) on derivatives | ||
Gain recognized in other comprehensive (loss) income | 87 | 21 |
Foreign currency forward exchange contracts | Not designated as hedging instrument | Net foreign exchange loss (gain) | ||
Gain (loss) on derivatives | ||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | -169 | -1 |
Foreign currency forward exchange contracts | Cash flow hedges | Cost of goods sold | ||
Gain (loss) on derivatives | ||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | 31 | -12 |
Interest rate contracts | Fair value hedges | Interest expense (income), net | ||
Gain (loss) on derivatives | ||
Income (expense) and gain (loss) reclassified into or recorded in net earnings | $121 | $86 |
Financial_Instruments_and_Fair4
Financial Instruments and Fair Value Measures (Details 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Assets | ||
Derivatives in asset position | $199 | $211 |
Liabilities | ||
Derivatives in liability position | 93 | 243 |
Cumulative unrealized holding gains on available-for-sale equity securities | 4 | 3 |
Fair value | ||
Assets | ||
Short term investments | 129 | 145 |
Total assets | 129 | 145 |
Liabilities | ||
Total liabilities | 15,491 | 15,288 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Short term investments | 47 | 68 |
Total assets | 47 | 68 |
Liabilities | ||
Total liabilities | 14,810 | 14,749 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Short term investments | 16 | 13 |
Total assets | 16 | 13 |
Liabilities | ||
Total liabilities | 681 | 539 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Short term investments | 66 | 64 |
Total assets | 66 | 64 |
Recurring | Fair value | ||
Assets | ||
Cash and equivalents | 7,906 | 8,348 |
Equity securities | 15 | 13 |
Total assets | 8,120 | 8,581 |
Liabilities | ||
Interest rate hedges | 59 | 180 |
Total liabilities | 93 | 243 |
Recurring | Fair value | Foreign Exchange Contract [Member] | ||
Assets | ||
Derivatives in asset position | 199 | 211 |
Liabilities | ||
Derivatives in liability position | 34 | 63 |
Recurring | Fair value | Time deposits | ||
Assets | ||
Short term investments | 9 | |
Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Cash and equivalents | 992 | 1,214 |
Equity securities | 15 | 13 |
Total assets | 1,007 | 1,227 |
Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Cash and equivalents | 6,914 | 7,134 |
Total assets | 7,113 | 7,354 |
Liabilities | ||
Interest rate hedges | 59 | 180 |
Total liabilities | 93 | 243 |
Recurring | Significant other observable inputs (Level 2) | Foreign Exchange Contract [Member] | ||
Assets | ||
Derivatives in asset position | 199 | 211 |
Liabilities | ||
Derivatives in liability position | 34 | 63 |
Recurring | Significant other observable inputs (Level 2) | Time deposits | ||
Assets | ||
Short term investments | $9 |
Financial_Instruments_and_Fair5
Financial Instruments and Fair Value Measures (Details 4) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
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 $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Book values | ||
Assets | ||
Investments | $96 | $95 |
Liabilities | ||
Short-term borrowings | 569 | 425 |
Current portion of long-term debt and lease obligations | 4,021 | 4,021 |
Long-term debt and lease obligations, excluding fair value hedges | 10,742 | 10,745 |
Fair value | ||
Assets | ||
Investments | 129 | 145 |
Liabilities | ||
Short-term borrowings | 569 | 425 |
Current portion of long-term debt and lease obligations | 4,029 | 4,033 |
Long-term debt and lease obligations, excluding fair value hedges | $10,893 | $10,830 |
Financial_Instruments_and_Fair7
Financial Instruments and Fair Value Measures (Details 6) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Fair value | ||
Assets | ||
Investments | $129 | $145 |
Total assets | 129 | 145 |
Liabilities | ||
Short-term borrowings | 569 | 425 |
Current portion of long-term debt and lease obligations | 4,029 | 4,033 |
Long-term debt and lease obligations, excluding fair value hedges | 10,893 | 10,830 |
Total liabilities | 15,491 | 15,288 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Investments | 47 | 68 |
Total assets | 47 | 68 |
Liabilities | ||
Current portion of long-term debt and lease obligations | 4,007 | 4,012 |
Long-term debt and lease obligations, excluding fair value hedges | 10,803 | 10,737 |
Total liabilities | 14,810 | 14,749 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Investments | 16 | 13 |
Total assets | 16 | 13 |
Liabilities | ||
Short-term borrowings | 569 | 425 |
Current portion of long-term debt and lease obligations | 22 | 21 |
Long-term debt and lease obligations, excluding fair value hedges | 90 | 93 |
Total liabilities | 681 | 539 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Investments | 66 | 64 |
Total assets | $66 | $64 |
Financial_Instruments_and_Fair8
Financial Instruments and Fair Value Measures (Details 7) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
USD ($) | USD ($) | VEF | Governmental accounts in Greece, Portugal, Italy and Spain | Governmental accounts in Greece, Portugal, Italy and Spain | Venezuelan | Venezuelan | Net accounts receivables | Net accounts receivables | Net accounts receivables | Total sales | Total sales | |
customer | USD ($) | USD ($) | USD ($) | VEF | customer | U.S. wholesalers | U.S. wholesalers | HUMIRA | HUMIRA | |||
Concentration of Risk | ||||||||||||
Number of principal customers | 3 | 3 | ||||||||||
Concentrations risk (as a percent) | 48.00% | 49.00% | 62.00% | 58.00% | ||||||||
Net governmental receivables outstanding | $479 | $446 | ||||||||||
Net monetary assets | 265 | |||||||||||
Net sales | 5,040 | 4,563 | 46 | |||||||||
Exchange rate | 6.3 | 12 | ||||||||||
Asset devaluation loss | $126 |
Financial_Instruments_and_Fair9
Financial Instruments and Fair Value Measures (Detail 8) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Mar. 27, 2015 |
Short-term Debt [Line Items] | ||||
Short-term Debt | $569,000,000 | $425,000,000 | ||
Revolving Credit Facility [Member] | ||||
Short-term Debt [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 3,000,000,000 | |||
Line of Credit Facility, Amount Outstanding | 0 | 0 | ||
Commercial Paper | ||||
Short-term Debt [Line Items] | ||||
Short-term Debt | 569,000,000 | 416,000,000 | ||
Short-term Debt, Weighted Average Interest Rate | 0.30% | 0.20% | ||
Bridge Term Loan Agreement | Term loan facility | ||||
Short-term Debt [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $18,000,000,000 |
PostEmployment_Benefits_Detail
Post-Employment Benefits (Details) (AbbVie sponsored plans, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Post-Employment Benefits | ||
Contribution by employer | $150 | $370 |
Defined benefit plans | ||
Post-Employment Benefits | ||
Service cost | 58 | 43 |
Interest cost | 56 | 55 |
Expected return on plan assets | -81 | -75 |
Amortization of actuarial losses (gains) and prior service costs | 34 | 17 |
Net periodic benefit cost | 67 | 40 |
Other post-employment plans | ||
Post-Employment Benefits | ||
Service cost | 6 | 5 |
Interest cost | 6 | 6 |
Amortization of actuarial losses (gains) and prior service costs | 1 | -1 |
Net periodic benefit cost | $13 | $10 |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | 0 Months Ended | 12 Months Ended | |
In Millions, except Share data in Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 02, 2013 | Dec. 31, 2014 |
item | ||||
Stock-Based Compensation | ||||
Stock compensation expense recognized | $119 | $106 | ||
Abbott | ||||
Stock-Based Compensation | ||||
Number of awards received in connection with the separation | 1 | |||
Number of awards granted to employees other than in connection with the separation | 0 | |||
Stock Options | ||||
Stock-Based Compensation | ||||
Exercise price for awards granted as percentage of market value on the date of grant | 100.00% | |||
Contractual term | 10 years | |||
Weighted-average grant-date fair value of the stock options granted | $9.96 | $9.83 | ||
Options | ||||
Outstanding at the beginning of the period (in shares) | 28,280 | |||
Granted (in shares) | 1,205 | |||
Exercised (in shares) | -2,356 | |||
Lapsed (in shares) | -34 | |||
Outstanding at the end of the period (in shares) | 27,095 | 28,280 | ||
Exercisable at the end of the period (in shares) | 24,579 | |||
Weighted average exercise price | ||||
Outstanding at the beginning of the period (in dollars per share) | $28.53 | |||
Granted (in dollars per share) | $58.88 | |||
Exercised (in dollars per share) | $25.03 | |||
Lapsed (in dollars per share) | $25.92 | |||
Outstanding at the end of the period (in dollars per share) | $30.19 | $28.53 | ||
Exercisable at the end of the period (in dollars per share) | $27.99 | |||
Weighted average remaining life (in years) | ||||
Outstanding at the end of the period | 3 years 7 months 6 days | 3 years 3 months 18 days | ||
Exercisable at end of the period | 3 years | |||
Aggregate intrinsic value | ||||
Outstanding at the end of the period | 768 | 1,044 | ||
Exercisable at the end of the period | 751 | |||
Additional information | ||||
Unrecognized compensation cost | 8 | |||
Period for recognition of unrecognized compensation cost | 2 years | |||
Aggregate intrinsic value of options exercised | 83 | 72 | ||
RSAs & RSUs | ||||
Additional information | ||||
Period for recognition of unrecognized compensation cost | 2 years | |||
Share units | ||||
Unvested shares at the beginning of the period (in shares) | 12,815 | |||
Granted (in shares) | 4,336 | |||
Vested (in shares) | -5,293 | |||
Lapsed (in shares) | -155 | |||
Outstanding at the end of the period (in shares) | 11,703 | |||
Weighted average grant date fair value | ||||
Unvested shares at the beginning of the period (in dollars per share) | $40.98 | |||
Granted (in dollars per share) | $58.89 | |||
Vested (in dollars per share) | $36.99 | |||
Lapsed (in dollars per share) | $44.42 | |||
Outstanding at the end of the period (in dollars per share) | $49.37 | |||
Additional information | ||||
Fair market value of awards vested | 310 | 314 | ||
Unrecognized compensation cost | $303 |
Equity_Details_2
Equity (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 14, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | 15-May-14 | Sep. 30, 2014 | |
Cash Dividends | |||||||
Dividends declared (in dollars per share) | $0.51 | $0.42 | |||||
Quarter One | |||||||
Dividends Payable | |||||||
Date declared | 19-Feb-15 | 20-Feb-14 | |||||
Date of record | 15-Apr-15 | ||||||
Date paid | 15-May-15 | 14-Feb-14 | |||||
Cash Dividends | |||||||
Dividends declared (in dollars per share) | $0.51 | $0.49 | |||||
Dividends paid (in dollars per share) | $0.40 | ||||||
Percentage increase in dividends declared | 4.00% | ||||||
Quarter Two | |||||||
Dividends Payable | |||||||
Date paid | 15-May-14 | ||||||
Cash Dividends | |||||||
Dividends paid (in dollars per share) | $0.42 | ||||||
Quarter Three | |||||||
Cash Dividends | |||||||
Dividends declared (in dollars per share) | $0.42 | ||||||
Quarter Four | |||||||
Dividends Payable | |||||||
Date declared | 20-Oct-14 | 12-Dec-13 | |||||
Date of record | 15-Jan-15 | ||||||
Date paid | 13-Feb-15 | ||||||
Cash Dividends | |||||||
Dividends declared (in dollars per share) | $0.49 | ||||||
Percentage increase in dividends declared | 17.00% |
Equity_Details_3
Equity (Details 3) (USD $) | 3 Months Ended | ||||
Share data in Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Oct. 20, 2014 | Feb. 15, 2013 | Dec. 31, 2013 |
Stock Repurchase Program | |||||
Amount authorized under stock repurchase program | $5,000,000,000 | $5,000,000,000 | $1,500,000,000 | ||
Shares repurchased | 4 | 5 | |||
Payment for shares repurchased on the open market | 250,000,000 | 250,000,000 | |||
Share repurchase authorization amount remaining | 9,400,000,000 | ||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | -2,031,000,000 | -442,000,000 | |||
Other comprehensive (loss) income before reclassifications | -431,000,000 | -8,000,000 | |||
Amounts reclassified from accumulated other comprehensive loss | -5,000,000 | 24,000,000 | |||
Other comprehensive (loss) income | -436,000,000 | 16,000,000 | |||
Ending balance | -2,467,000,000 | -426,000,000 | |||
Foreign currency translation adjustments | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | -603,000,000 | 470,000,000 | |||
Other comprehensive (loss) income before reclassifications | -549,000,000 | -29,000,000 | |||
Other comprehensive (loss) income | -549,000,000 | -29,000,000 | |||
Ending balance | -1,152,000,000 | 441,000,000 | |||
Pension and post-employment benefits | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | -1,608,000,000 | -827,000,000 | |||
Other comprehensive (loss) income before reclassifications | 30,000,000 | ||||
Amounts reclassified from accumulated other comprehensive loss | 25,000,000 | 12,000,000 | |||
Other comprehensive (loss) income | 55,000,000 | 12,000,000 | |||
Ending balance | -1,553,000,000 | -815,000,000 | |||
Unrealized gains (losses) on marketable equity securities | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | 3,000,000 | 2,000,000 | |||
Other comprehensive (loss) income before reclassifications | 1,000,000 | ||||
Other comprehensive (loss) income | 1,000,000 | ||||
Ending balance | 4,000,000 | 2,000,000 | 2,000,000 | ||
Gains (losses) on hedging activities | |||||
Changes in accumulated other comprehensive Income | |||||
Beginning balance | 177,000,000 | -87,000,000 | |||
Other comprehensive (loss) income before reclassifications | 87,000,000 | 21,000,000 | |||
Amounts reclassified from accumulated other comprehensive loss | -30,000,000 | 12,000,000 | |||
Other comprehensive (loss) income | 57,000,000 | 33,000,000 | |||
Ending balance | $234,000,000 | ($54,000,000) |
Equity_Details_4
Equity (Details 4) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pension and post-employment benefits | ||
Significant amounts reclassified out of each component of AOCI | ||
Amortization of actuarial losses and other | $35 | $16 |
Less tax benefit | -10 | -4 |
Total reclassification, net of tax | 25 | 12 |
Gains (losses) on hedging activities | ||
Significant amounts reclassified out of each component of AOCI | ||
(Gains) losses on designated cash flow hedges | -31 | 12 |
Less tax expense | 1 | |
Total reclassification, net of tax | ($30) | $12 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Taxes | ||
Effective tax rate (as a percent) | 27.00% | 24.00% |
Statutory tax rate (as a percent) | 35.00% | |
Reasonably possible amount that gross unrecognized tax benefits may change within the next twelve months, high end of range | $21 |
Legal_Proceedings_and_Continge1
Legal Proceedings and Contingencies (Details) | 1 Months Ended | 3 Months Ended | 1 Months Ended | |
Nov. 30, 2014 | Aug. 31, 2013 | Mar. 31, 2015 | Nov. 30, 2009 | |
individual | item | item | ||
Legal Proceedings and Contingencies | ||||
Number of individual putative class action lawsuit | 5 | |||
Depakote | Sidney Hillman Health Center of Rochester, et al. v. AbbVie Inc., et al. | ||||
Legal Proceedings and Contingencies | ||||
Number of healthcare benefit providers who filed lawsuits | 3 | |||
Number of generic companies with whom certain litigation related agreements were entered into | 3 | |||
HUMIRA patent infringement claim, NYU and Centocor | AndroGel Antitrust Litigation | ||||
Legal Proceedings and Contingencies | ||||
Number of individual plaintiff lawsuits | 3 | |||
Number of purported class actions | 7 | |||
Allegation of proposed generic products infringing AbbVie's patents and seeking declaratory and injunctive relief | Matrix Laboratories, Inc.'s, Matrix Laboratories, Ltd.'s, and Mylan, Inc.'s case | ||||
Legal Proceedings and Contingencies | ||||
Stay period | 5 years |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
customer | ||
segment | ||
Segment Information | ||
Number of Operating Segments | 1 | |
Number of principal customers | 3 | |
Segment Information | ||
Net sales | $5,040 | $4,563 |
HUMIRA | ||
Segment Information | ||
Net sales | 3,111 | 2,637 |
Synagis | ||
Segment Information | ||
Net sales | 335 | 354 |
VIEKIRA | ||
Segment Information | ||
Net sales | 231 | |
Lupron | ||
Segment Information | ||
Net sales | 192 | 189 |
Synthroid | ||
Segment Information | ||
Net sales | 186 | 157 |
Kaletra | ||
Segment Information | ||
Net sales | 180 | 195 |
AndroGel | ||
Segment Information | ||
Net sales | 153 | 254 |
Creon | ||
Segment Information | ||
Net sales | 127 | 107 |
Sevoflurane | ||
Segment Information | ||
Net sales | 126 | 142 |
Duodopa | ||
Segment Information | ||
Net sales | 53 | 52 |
Dyslipidemia products | ||
Segment Information | ||
Net sales | 43 | 96 |
All other | ||
Segment Information | ||
Net sales | $303 | $380 |