Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 24, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | AbbVie Inc. | |
Entity Central Index Key | 1,551,152 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,596,429,740 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net revenues | $ 6,995 | $ 6,432 | $ 20,477 | $ 18,842 |
Cost of products sold | 1,616 | 1,504 | 4,760 | 4,278 |
Selling, general and administrative | 1,452 | 1,381 | 4,324 | 4,202 |
Research and development | 1,222 | 1,106 | 3,580 | 3,176 |
Acquired in-process research and development | 0 | 80 | 15 | 160 |
Total operating costs and expenses | 4,290 | 4,071 | 12,679 | 11,816 |
Operating earnings | 2,705 | 2,361 | 7,798 | 7,026 |
Interest expense, net | 252 | 250 | 752 | 675 |
Net foreign exchange loss (gain) | 9 | (4) | 28 | 313 |
Other expense, net | 349 | 101 | 484 | 152 |
Earnings before income tax expense | 2,095 | 2,014 | 6,534 | 5,886 |
Income tax expense | 464 | 416 | 1,277 | 1,324 |
Net earnings | $ 1,631 | $ 1,598 | $ 5,257 | $ 4,562 |
Per share data | ||||
Basic earnings per share (in dollars per share) | $ 1.02 | $ 0.97 | $ 3.28 | $ 2.79 |
Diluted earnings per share (in dollars per share) | 1.01 | 0.97 | 3.27 | 2.78 |
Cash dividends declared per common share (in dollars per share) | $ 0.64 | $ 0.57 | $ 1.92 | $ 1.71 |
Weighted-average basic shares outstanding (in shares) | 1,597 | 1,632 | 1,596 | 1,624 |
Weighted-average diluted shares outstanding (in shares) | 1,603 | 1,640 | 1,602 | 1,633 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net earnings | $ 1,631 | $ 1,598 | $ 5,257 | $ 4,562 |
Foreign currency translation adjustments, net of tax expense (benefit) of $7 for the three months and $40 for the nine months ended September 30, 2017 and $10 for the three months and $30 for the nine months ended September 30, 2016 | 183 | 31 | 602 | 164 |
Pension and post-employment benefits, net of tax expense (benefit) of $8 for the three months and $23 for the nine months ended September 30, 2017 and $8 for the three months and $23 for the nine months ended September 30, 2016 | 8 | 15 | 21 | 48 |
Marketable security activities, net of tax expense (benefit) of $4 for the three months and $6 for the nine months ended September 30, 2017 and $1 for the three months and $(7) for the nine months ended September 30, 2016 | (28) | 12 | (18) | 19 |
Other comprehensive income (loss) | (65) | 50 | (27) | 221 |
Comprehensive income | 1,566 | 1,648 | 5,230 | 4,783 |
Net investment hedging activities, net of tax expense (benefit) of $(52) for the three months and $(174) for the nine months ended September 30, 2017 and $— for the three months and $— for the nine months ended September 30, 2016 | ||||
Hedging activities, net of tax expense (benefit) | (90) | 0 | (307) | 0 |
Cash flow hedging activities, net of tax expense (benefit) of $(14) for the three months and $(29) for the nine months ended ended September 30, 2017 and $1 for the three months and $(3) for the nine months ended September 30, 2016 | ||||
Hedging activities, net of tax expense (benefit) | $ (138) | $ (8) | $ (325) | $ (10) |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Foreign currency translation adjustments, tax expense (benefit) | $ 7 | $ 10 | $ 40 | $ 30 |
Pension and post-employment benefits, tax expense (benefit) | 8 | 8 | 23 | 23 |
Unrealized (losses) gains on marketable equity securities, tax (benefit) expense | 4 | 1 | 6 | (7) |
Net Investment Hedges | ||||
Hedging activities, tax (benefit) expense | (52) | 0 | (174) | 0 |
Cash Flow Hedges | ||||
Hedging activities, tax (benefit) expense | $ (14) | $ 1 | $ (29) | $ (3) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and equivalents | $ 8,446 | $ 5,100 |
Short-term investments | 1,108 | 1,323 |
Accounts receivable, net | 4,891 | 4,758 |
Inventories | 1,785 | 1,444 |
Prepaid expenses and other | 2,700 | 3,562 |
Total current assets | 18,930 | 16,187 |
Investments | 1,971 | 1,783 |
Property and equipment, net | 2,697 | 2,604 |
Intangible assets, net | 28,167 | 28,897 |
Goodwill | 15,748 | 15,416 |
Other assets | 1,327 | 1,212 |
Total assets | 68,840 | 66,099 |
Current liabilities | ||
Short-term borrowings | 800 | 377 |
Current portion of long-term debt and lease obligations | 3,021 | 25 |
Accounts payable and accrued liabilities | 9,212 | 9,379 |
Total current liabilities | 13,033 | 9,781 |
Long-term debt and lease obligations | 33,974 | 36,440 |
Deferred income taxes | 6,147 | 6,890 |
Other long-term liabilities | 8,999 | 8,352 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,767,419,360 shares issued as of September 30, 2017 and 1,754,900,486 as of December 31, 2016 | 18 | 18 |
Common stock held in treasury, at cost, 171,296,169 shares as of September 30, 2017 and 162,387,762 as of December 31, 2016 | (11,419) | (10,852) |
Additional paid-in capital | 14,154 | 13,678 |
Retained earnings | 6,547 | 4,378 |
Accumulated other comprehensive loss | (2,613) | (2,586) |
Total stockholders’ equity | 6,687 | 4,636 |
Total liabilities and equity | $ 68,840 | $ 66,099 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
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) | 1,767,419,360 | 1,754,900,486 |
Common stock held in treasury, at cost (in shares) | 171,296,169 | 162,387,762 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net earnings | $ 5,257 | $ 4,562 |
Adjustments to reconcile net earnings to net cash from operating activities: | ||
Depreciation | 324 | 307 |
Amortization of intangible assets | 808 | 554 |
Change in fair value of contingent consideration liabilities | 547 | 143 |
Stock-based compensation | 288 | 278 |
Upfront costs and milestones related to collaborations | 85 | 230 |
Devaluation loss related to Venezuela | 0 | 298 |
Other, net | (73) | 326 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (163) | (129) |
Inventories | (119) | 28 |
Prepaid expenses and other assets | (22) | (122) |
Accounts payable and other liabilities | 444 | (975) |
Cash flows from operating activities | 7,376 | 5,500 |
Cash flows from investing activities | ||
Acquisitions of businesses, net of cash acquired | 0 | (2,477) |
Other acquisitions and investments | (180) | (172) |
Acquisitions of property and equipment | (347) | (365) |
Purchases of investment securities | (1,838) | (4,520) |
Sales and maturities of investment securities | 1,890 | 1,579 |
Cash flows from investing activities | (475) | (5,955) |
Cash flows from financing activities | ||
Net change in short-term borrowings | 423 | (406) |
Proceeds from issuance of long-term debt | 0 | 7,771 |
Repayments of long-term debt and lease obligations | (18) | (2,006) |
Debt issuance costs | 0 | (52) |
Dividends paid | (3,077) | (2,784) |
Purchases of treasury stock | (905) | (4,223) |
Proceeds from the exercise of stock options | 214 | 210 |
Payments of contingent consideration liabilities | (268) | 0 |
Other, net | 47 | 64 |
Cash flows from financing activities | (3,584) | (1,426) |
Effect of exchange rate changes on cash and equivalents | 29 | (300) |
Net change in cash and equivalents | 3,346 | (2,181) |
Cash and equivalents, beginning of period | 5,100 | 8,399 |
Cash and equivalents, end of period | 8,446 | 6,218 |
Supplemental schedule of non-cash investing and financing activities | ||
Issuance of common shares associated with acquisitions of businesses | $ 0 | $ 3,923 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Historical Presentation The unaudited interim condensed consolidated financial statements of AbbVie Inc. (AbbVie or the company) have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the company’s audited consolidated financial statements and notes included in the company’s Annual Report on Form 10-K for the year ended December 31, 2016 . It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the company’s financial position and operating results. Net revenues and net earnings for any interim period are not necessarily indicative of future or annual results. Certain reclassifications were made to conform the prior period interim condensed consolidated financial statements to the current period presentation. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The standard provides clarifying guidance to assist in the evaluation of whether transactions are treated as business combinations or asset acquisitions. AbbVie elected to early adopt the changes prospectively in the first quarter of 2017. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . AbbVie adopted the standard in the first quarter of 2017. As a result, all excess tax benefits associated with stock-based awards are recognized in the statement of earnings when the awards vest or settle, rather than in stockholders' equity. In addition, excess tax benefits in the statement of cash flows are now classified as an operating activity rather than as a financing activity. AbbVie adopted these changes prospectively. Accordingly, the company recognized excess tax benefits in income tax expense of $14 million for the three months and $53 million for the nine months ended September 30, 2017 and classified them within cash flows from operating activities. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40) . The amendments in this standard supersede most current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) modified retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. AbbVie will adopt the standard effective the first quarter of 2018 and apply the amendments using the modified retrospective method. The company has made substantial progress in its review of the new standard and will complete its assessment by December 31, 2017. AbbVie does not expect significant changes to the amounts or timing of revenue recognition for product sales, which is its primary revenue stream. However, the company expects that the adoption of the new standard will require a cumulative-effect adjustment to retained earnings on January 1, 2018 of approximately $130 million , net of tax, primarily related to certain deferred license revenues that were originally expected to be recognized through early 2020. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The standard requires several targeted changes including that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net earnings. These provisions will not impact the accounting for AbbVie's investments in debt securities. The new guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. Amendments are to be applied as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. This standard will be effective for AbbVie starting with the first quarter of 2018. The standard does not permit early adoption with the exception of certain targeted provisions. AbbVie is unable to estimate the impact of adopting this standard on its financial statements as it will be dependent upon the composition of its equity investment portfolio as of the adoption date and future changes in fair value subsequent to the adoption date. However, based on historical trends, AbbVie does not believe the adoption will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The standard outlines a comprehensive lease accounting model that supersedes the current lease guidance and requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new standard must be adopted using the modified retrospective approach and will be effective for AbbVie starting with the first quarter of 2019, with early adoption permitted. AbbVie will adopt the standard effective in the first quarter of 2019 and is currently assessing the impact of adopting this guidance on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) . The standard changes how credit losses are measured for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, the standard requires the use of a new forward-looking "expected credit loss" model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. Additionally, the standard requires new disclosures and will be effective for AbbVie starting with the first quarter of 2020. Early adoption beginning in the first quarter of 2019 is permitted. With certain exceptions, adjustments are to be applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact to retained earnings as of the beginning of the fiscal year of adoption. AbbVie is currently assessing the impact and timing of adopting this guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) . The new standard requires entities to recognize the income tax consequences of an intercompany transfer of an asset other than inventory when the transfer occurs. Under current U.S. GAAP, the income tax consequences of these intercompany asset transfers are deferred until the asset is sold to a third party or otherwise recovered through use. The standard will be effective for AbbVie starting with the first quarter of 2018. Adjustments for this update are to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings with any adjustments reflected as of the beginning of the fiscal year of adoption. AbbVie is currently assessing the impact of adopting this guidance on its consolidated financial statements. As of September 30, 2017 , AbbVie had approximately $1.8 billion of prepaid income tax assets that will be affected by this standard, of which $1.3 billion was included in prepaid expenses and other on the condensed consolidated balance sheet. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The standard requires that an employer continue to report the service cost component of net periodic benefit cost in the same income statement line item or items as other employee compensation costs arising from services rendered during the period. The other components of net periodic benefit cost are required to be presented separately outside of income from operations and are not eligible for capitalization. The standard will be effective for AbbVie starting with the first quarter of 2018. Upon adoption, the company will apply the income statement classification provisions of this standard retrospectively and preliminarily expects to reclassify income of approximately $50 million from operating earnings to non-operating income for the year ending December 31, 2017. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The standard simplifies the application of hedge accounting and more closely aligns the accounting with an entity’s risk management activities. The standard will be effective for AbbVie starting with the first quarter of 2019, with early adoption permitted. AbbVie is currently assessing the impact and timing of adopting this guidance on its consolidated financial statements. |
Supplemental Financial Informat
Supplemental Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Financial Information | |
Supplemental Financial Information | Supplemental Financial Information Interest Expense, Net Three months ended Nine months ended (in millions) 2017 2016 2017 2016 Interest expense $ 293 $ 271 $ 851 $ 731 Interest income (41 ) (21 ) (99 ) (56 ) Interest expense, net $ 252 $ 250 $ 752 $ 675 Inventories (in millions) September 30, 2017 December 31, 2016 Finished goods $ 353 $ 223 Work-in-process 1,271 1,080 Raw materials 161 141 Inventories $ 1,785 $ 1,444 Property and Equipment (in millions) September 30, 2017 December 31, 2016 Property and equipment, gross $ 7,894 $ 7,526 Accumulated depreciation (5,197 ) (4,922 ) Property and equipment, net $ 2,697 $ 2,604 Depreciation expense was $111 million for the three months and $324 million for the nine months ended September 30, 2017 and $96 million for the three months and $307 million for the nine months ended September 30, 2016 . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share AbbVie grants certain restricted stock awards (RSAs) and restricted stock units (RSUs) that are considered to be participating securities. Due to the presence of participating securities, AbbVie calculates earnings per share (EPS) using the more dilutive of the treasury stock or the two-class method. For all periods presented, the two-class method was more dilutive. The following table summarizes the impact of the two-class method: Three months ended Nine months ended (in millions, except per share information) 2017 2016 2017 2016 Basic EPS Net earnings $ 1,631 $ 1,598 $ 5,257 $ 4,562 Earnings allocated to participating securities 8 8 26 23 Earnings available to common shareholders $ 1,623 $ 1,590 $ 5,231 $ 4,539 Weighted-average basic shares outstanding 1,597 1,632 1,596 1,624 Basic earnings per share $ 1.02 $ 0.97 $ 3.28 $ 2.79 Diluted EPS Net earnings $ 1,631 $ 1,598 $ 5,257 $ 4,562 Earnings allocated to participating securities 8 8 26 23 Earnings available to common shareholders $ 1,623 $ 1,590 $ 5,231 $ 4,539 Weighted-average shares of common stock outstanding 1,597 1,632 1,596 1,624 Effect of dilutive securities 6 8 6 9 Weighted-average diluted shares outstanding 1,603 1,640 1,602 1,633 Diluted earnings per share $ 1.01 $ 0.97 $ 3.27 $ 2.78 Certain shares issuable under stock-based compensation plans were excluded from the computation of EPS because the effect would have been antidilutive. The number of common shares excluded were insignificant for all periods presented. |
Licensing, Acquisitions, and Ot
Licensing, Acquisitions, and Other Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Licensing, Acquisitions, and Other Arrangements | Licensing, Acquisitions and Other Arrangements Acquisition of Stemcentrx On June 1, 2016, AbbVie acquired all of the outstanding equity interests in Stemcentrx, a privately-held biotechnology company. The transaction expanded AbbVie’s oncology pipeline by adding the late-stage asset rovalpituzumab tesirine (Rova-T), four additional early-stage clinical compounds in solid tumor indications and a significant portfolio of pre-clinical assets. Rova-T is currently in registrational trials for small cell lung cancer. The acquisition of Stemcentrx was accounted for as a business combination using the acquisition method of accounting. The aggregate upfront consideration for the acquisition of Stemcentrx consisted of approximately 62.4 million shares of AbbVie common stock, issued from common stock held in treasury, and cash. AbbVie may make certain contingent payments upon the achievement of defined development and regulatory milestones. As of the acquisition date, the maximum aggregate amount payable for development and regulatory milestones was $4.0 billion. The acquisition-date fair value of these milestones was $620 million and was estimated using a combination of probability-weighted discounted cash flow models and Monte Carlo simulation models. The estimate was determined based on significant inputs that are not observable in the market, referred to as Level 3 inputs, as described in more detail in Note 8. The following table summarizes total consideration: (in millions) Cash $ 1,883 Fair value of AbbVie common stock 3,923 Contingent consideration 620 Total consideration $ 6,426 The following table summarizes fair values of assets acquired and liabilities assumed as of the June 1, 2016 acquisition date: (in millions) Assets acquired and liabilities assumed Accounts receivable $ 1 Prepaid expenses and other 7 Property and equipment 17 Intangible assets - Indefinite-lived research and development 6,100 Accounts payable and accrued liabilities (31 ) Deferred income taxes (1,933 ) Other long-term liabilities (7 ) Total identifiable net assets 4,154 Goodwill 2,272 Total assets acquired and liabilities assumed $ 6,426 Intangible assets were related to acquired in-process research and development (IPR&D) for Rova-T, four additional early-stage clinical compounds in solid tumor indications and several additional pre-clinical compounds. The estimated fair value of the acquired IPR&D was determined using the multi-period excess earnings model of the “income approach,” which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated annual cash flows for each asset or product (including net revenues, cost of sales, research and development (R&D) costs, selling and marketing costs and working capital/contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the regulatory approval probabilities, commercial success risks, competitive landscape as well as other factors. The goodwill recognized represents expected synergies, including the ability to: (i) leverage the respective strengths of each business; (ii) expand the combined company’s product portfolio; (iii) accelerate AbbVie's clinical and commercial presence in oncology; and (iv) establish a strong leadership position in oncology. Goodwill was also impacted by the establishment of a deferred tax liability for the acquired identifiable intangible assets which have no tax basis. The goodwill is not deductible for tax purposes. Pro Forma Financial Information The following table presents the unaudited pro forma combined results of operations of AbbVie and Stemcentrx for the three and nine months ended September 30, 2016 as if the acquisition of Stemcentrx had occurred on January 1, 2015: Three months ended Nine months ended (in millions, except per share information) 2016 2016 Net revenues $ 6,432 $ 18,845 Net earnings 1,579 4,515 Basic earnings per share $ 0.97 $ 2.72 Diluted earnings per share $ 0.96 $ 2.71 The unaudited pro forma financial information was prepared using the acquisition method of accounting and was based on the historical financial information of AbbVie and Stemcentrx. In order to reflect the occurrence of the acquisition on January 1, 2015 as required, the unaudited pro forma financial information includes adjustments to reflect the additional interest expense associated with the issuance of debt to finance the acquisition and the reclassification of acquisition, integration and financing-related costs incurred during 2016 to the three and nine months ended September 30, 2015 . The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2015. In addition, the unaudited pro forma financial information is not a projection of the future results of operations of the combined company nor does it reflect the expected realization of any cost savings or synergies associated with the acquisition. Acquisition of BI 655066 and BI 655064 from Boehringer Ingelheim On April 1, 2016, AbbVie acquired all rights to risankizumab (BI 655066), an anti-IL-23 monoclonal biologic antibody in Phase 3 development for psoriasis, from Boehringer Ingelheim (BI) pursuant to a global collaboration agreement. AbbVie is also evaluating the potential of this biologic therapy in Crohn’s disease, psoriatic arthritis and asthma. In addition to risankizumab, AbbVie also gained rights to an anti-CD40 antibody, BI 655064, currently in Phase 1 development. BI will retain responsibility for further development of BI 655064, and AbbVie may elect to advance the program after completion of certain clinical achievements. The acquired assets include all patents, data, know-how, third-party agreements, regulatory filings and manufacturing technology related to BI 655066 and BI 655064. The company concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. Under the terms of the agreement, AbbVie made an upfront payment of $595 million. Additionally, $18 million of payments to BI, pursuant to a contractual obligation to reimburse BI for certain development costs it incurred prior to the acquisition date, were initially deferred. AbbVie may make certain contingent payments upon the achievement of defined development, regulatory and commercial milestones, as well as royalty payments based on net revenues of licensed products. As of the acquisition date, the maximum aggregate amount payable for development and regulatory milestones was approximately $1.6 billion. The acquisition-date fair value of these milestones was $606 million. The acquisition-date fair value of contingent royalty payments was $2.8 billion. The potential contingent consideration payments were estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which were then discounted to present value. The fair value measurements were based on Level 3 inputs. The following table summarizes total consideration: (in millions) Cash $ 595 Deferred consideration payable 18 Contingent consideration 3,365 Total consideration $ 3,978 The following table summarizes fair values of assets acquired as of the April 1, 2016 acquisition date: (in millions) Assets acquired Identifiable intangible assets - Indefinite-lived research and development $ 3,890 Goodwill 88 Total assets acquired $ 3,978 The estimated fair value of the acquired IPR&D was determined using the multi-period excess earnings model of the “income approach.” The goodwill recognized represents expected synergies, including an expansion of the company’s immunology product portfolio. Pro forma results of operations for this acquisition have not been presented because this acquisition is insignificant to AbbVie’s consolidated results of operations. Other Licensing & Acquisitions Activity Excluding the acquisitions above, cash outflows related to other acquisitions and investments totaled $180 million for the nine months ended September 30, 2017 and $172 million for the nine months ended September 30, 2016 . AbbVie recorded no IPR&D charges for the three months ended September 30, 2017 and recorded IPR&D charges of $15 million for the nine months ended September 30, 2017 . AbbVie recorded IPR&D charges of $80 million for the three months and $160 million for the nine months ended September 30, 2016 . In October 2017, AbbVie entered into a global strategic collaboration with Alector, Inc. (Alector) to develop and commercialize medicines to treat Alzheimer’s disease and other neurodegenerative disorders. AbbVie and Alector have agreed to research a portfolio of antibody targets and AbbVie has an option to global development and commercial rights to two targets. AbbVie will make an initial upfront payment of $205 million , which will be expensed to IPR&D in the fourth quarter of 2017. Alector will conduct exploratory research, drug discovery and development for lead programs up to the conclusion of the proof of concept studies. If the option is exercised, AbbVie will lead development and commercialization activities and could make additional payments to Alector of up to $986 million upon achievement of certain development and regulatory milestones. Alector and AbbVie will co-fund development and commercialization and will share global profits equally. |
Collaboration with Janssen Biot
Collaboration with Janssen Biotech, Inc. | 9 Months Ended |
Sep. 30, 2017 | |
Collaboration with Janssen Biotech, Inc. | |
Collaboration with Janssen Biotech, Inc. | Collaboration with Janssen Biotech, Inc. In December 2011, Pharmacyclics, a wholly-owned subsidiary of AbbVie, entered into a worldwide collaboration and license agreement with Janssen Biotech, Inc. and its affiliates (Janssen), one of the Janssen Pharmaceutical companies of Johnson & Johnson for the joint development and commercialization of IMBRUVICA, a novel, orally active, selective covalent inhibitor of Bruton's tyrosine kinase (BTK) and certain compounds structurally related to IMBRUVICA, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States. The collaboration provides Janssen with an exclusive license to commercialize IMBRUVICA outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $200 million to AbbVie. The collaboration also includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, Janssen is responsible for approximately 60% of collaboration development costs and AbbVie is responsible for the remaining 40% of collaboration development costs. In the United States, both parties have co-exclusive rights to commercialize the products; however, AbbVie is the principal in the end customer product sales. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Sales of IMBRUVICA are included in AbbVie's net revenues. Janssen's share of profits is included in AbbVie's cost of products sold. Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share. Outside the United States, Janssen is responsible for and has exclusive rights to commercialize IMBRUVICA. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. AbbVie's share of profits is included in AbbVie's net revenues. Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share. The following table shows the profit and cost sharing relationship between Janssen and AbbVie: Three months ended Nine months ended (in millions) 2017 2016 2017 2016 United States - Janssen's share of profits (included in cost of products sold) $ 268 $ 211 $ 727 $ 540 International - AbbVie's share of profits (included in net revenues) 114 64 306 175 Global - AbbVie's share of other costs (included in respective line items) 75 70 209 195 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of goodwill: (in millions) Balance as of December 31, 2016 $ 15,416 Foreign currency translation adjustments 332 Balance as of September 30, 2017 $ 15,748 The latest impairment assessment of goodwill was completed in the third quarter of 2017. As of September 30, 2017 , there were no accumulated goodwill impairment losses. Future impairment tests for goodwill will be performed annually in the third quarter, or earlier if impairment indicators exist. Intangible Assets, Net The following table summarizes intangible assets: September 30, 2017 December 31, 2016 (in millions) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets Developed product rights $ 16,456 $ (4,805 ) $ 11,651 $ 16,464 $ (4,256 ) $ 12,208 License agreements 7,869 (1,343 ) 6,526 7,809 (1,110 ) 6,699 Total definite-lived intangible assets 24,325 (6,148 ) 18,177 24,273 (5,366 ) 18,907 Indefinite-lived research and development 9,990 — 9,990 9,990 — 9,990 Total intangible assets, net $ 34,315 $ (6,148 ) $ 28,167 $ 34,263 $ (5,366 ) $ 28,897 Amortization expense was $268 million for the three months and $808 million for the nine months ended September 30, 2017 and $208 million for the three months and $554 million for the nine months ended September 30, 2016 . Amortization expense was included in cost of products sold in the condensed consolidated statements of earnings. For the nine months ended September 30, 2017 , no impairment charges were recorded to intangible assets. For the nine months ended September 30, 2016 , an impairment charge of $39 million was recorded related to certain developed product rights in the United States due to a decline in the market for the product. The fair value was determined based on a discounted cash flow analysis and the charge was included in cost of products sold in the condensed consolidated statement of earnings. The indefinite-lived intangible assets represent acquired IPR&D associated with products that have not yet received regulatory approval. The indefinite-lived intangible assets as of September 30, 2017 and December 31, 2016 primarily related to the acquisitions of Stemcentrx and BI compounds. See Note 4 for additional information. The latest impairment assessment of indefinite-lived intangible assets was completed in the third quarter of 2017. No impairment charges were recorded for the nine months ended September 30, 2017 and 2016 . Future impairment tests for indefinite-lived intangible assets will be performed annually in the third quarter, or earlier if impairment indicators exist. |
Restructuring Plans
Restructuring Plans | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plans | Restructuring Plans AbbVie recorded restructuring charges of $7 million for the three months and $34 million for the nine months ended September 30, 2017 and $5 million for the three months and $35 million for the nine months ended September 30, 2016 . The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, 2017 : (in millions) Accrued balance as of December 31, 2016 $ 87 Restructuring charges 34 Payments and other adjustments (65 ) Accrued balance as of September 30, 2017 $ 56 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measures | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measures | Financial Instruments and Fair Value Measures Risk Management Policy See Note 10 to the company's Annual Report on Form 10-K for the year ended December 31, 2016 for a summary of AbbVie's risk management policy and use of derivative instruments. Financial Instruments Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling $3.0 billion at September 30, 2017 and $2.2 billion at December 31, 2016 , are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than eighteen months . Accumulated gains and losses as of September 30, 2017 will be reclassified from accumulated other comprehensive loss (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement. The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are reflected in net foreign exchange loss in the consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $7.4 billion at September 30, 2017 and $6.6 billion at December 31, 2016 . The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. In the fourth quarter of 2016, the company issued €3.6 billion aggregate principal amount of senior Euro notes and designated the principal amounts of this foreign denominated debt as net investment hedges. Realized and unrealized gains and losses from these hedges are included in AOCI. AbbVie is a party to interest rate hedge contracts, designated as fair value hedges, with notional amounts totaling $11.8 billion at September 30, 2017 and December 31, 2016 . The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount. The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets: Fair value – Fair value – (in millions) Balance sheet caption September 30, December 31, 2016 Balance sheet caption September 30, December 31, 2016 Foreign currency forward exchange contracts Designated as cash flow hedges Prepaid expenses and other $ 1 $ 170 Accounts payable and accrued liabilities $ 150 $ 5 Designated as cash flow hedges Other assets — — Other long-term liabilities 6 — Not designated as hedges Prepaid expenses and other 52 55 Accounts payable and accrued liabilities 47 33 Interest rate swaps designated as fair value hedges Other assets — — Other long-term liabilities 295 338 Total derivatives $ 53 $ 225 $ 498 $ 376 While certain derivatives are subject to netting arrangements with the company’s counterparties, the company does not offset derivative assets and liabilities within the condensed consolidated balance sheets. The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income/(loss): Three months ended Nine months ended (in millions) 2017 2016 2017 2016 Foreign currency forward exchange contracts $ (114 ) $ (5 ) $ (253 ) $ 7 The amount of hedge ineffectiveness was insignificant for all periods presented. Assuming market rates remain constant through contract maturities, the company expects to transfer pre-tax unrealized losses of $117 million into cost of products sold for foreign currency cash flow hedges during the next 12 months. Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized a pre-tax loss in other comprehensive income (loss) of $142 million for the three months and $481 million for the nine months ended September 30, 2017 . The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings, including the effective portions of the net gains (losses) reclassified out of AOCI into net earnings. See Note 10 for the amount of net gains (losses) reclassified out of AOCI. Three months ended Nine months ended (in millions) Statement of earnings caption 2017 2016 2017 2016 Foreign currency forward exchange contracts Designated as cash flow hedges Cost of products sold $ 38 $ 4 $ 101 $ 23 Not designated as hedges Net foreign exchange loss (17 ) (15 ) (88 ) (122 ) Non-designated treasury rate lock agreements Other expense, net — — — (12 ) Interest rate swaps designated as fair value hedges Interest expense, net 11 (49 ) 43 321 Total $ 32 $ (60 ) $ 56 $ 210 The gain (loss) related to outstanding interest rate swaps designated as 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 all periods presented. Fair Value Measures The fair value hierarchy consists of the following three levels: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access; • Level 2 – Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and • Level 3 – Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company’s management about the assumptions market participants would use in pricing the asset or liability. The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of September 30, 2017 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical Significant Significant Assets Cash and equivalents $ 8,446 $ 669 $ 7,777 $ — Time deposits 500 — 500 — Debt securities 2,475 — 2,475 — Equity securities 57 57 — — Foreign currency contracts 53 — 53 — Total assets $ 11,531 $ 726 $ 10,805 $ — Liabilities Interest rate hedges $ 295 $ — $ 295 $ — Foreign currency contracts 203 — 203 — Contingent consideration 4,455 — — 4,455 Total liabilities $ 4,953 $ — $ 498 $ 4,455 The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of December 31, 2016 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical Significant Significant Assets Cash and equivalents $ 5,100 $ 1,191 $ 3,909 $ — Time deposits 1,014 — 1,014 — Debt securities 1,974 — 1,974 — Equity securities 76 76 — — Foreign currency contracts 225 — 225 — Total assets $ 8,389 $ 1,267 $ 7,122 $ — Liabilities Interest rate hedges $ 338 $ — $ 338 $ — Foreign currency contracts 38 — 38 — Contingent consideration 4,213 — — 4,213 Total liabilities $ 4,589 $ — $ 376 $ 4,213 The fair values of time deposits approximate their amortized cost due to the short maturities of these instruments. The fair values of available-for-sale debt securities were determined based on prices obtained from commercial pricing services. Available-for-sale equity securities consists of investments for which the fair values were 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 were valued using publicized spot curves for interest rate hedges and publicized forward curves for foreign currency contracts. The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs, including the discount rate, estimated probabilities and timing of achieving specified development, regulatory and commercial milestones and the estimated amount of future sales of the acquired products still in development. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of these inputs. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period. At September 30, 2017 , a 50 basis point increase/decrease in the assumed discount rate would have decreased/increased the value of the contingent consideration liabilities by approximately $160 million . Additionally, at September 30, 2017 , a five percentage point increase/decrease in the assumed probability of success across all potential indications would have increased/decreased the value of the contingent consideration liabilities by approximately $340 million . There have been no transfers of assets or liabilities between the fair value measurement levels. The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level 3 inputs: Nine months ended (in millions) 2017 2016 Beginning balance $ 4,213 $ — Additions (see Note 4) — 3,985 Change in fair value recognized in net earnings 547 143 Milestone payments (305 ) — Ending balance $ 4,455 $ 4,128 The change in fair value recognized in net earnings was recorded in other expense, net in the condensed consolidated statements of earnings for both the three and nine months ended September 30, 2017 and 2016 . In addition to the financial instruments that the company carries at fair value on the condensed consolidated balance sheets, certain financial instruments are carried at historical cost or some basis other than fair value. The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2017 are shown in the table below: Basis of fair value measurement (in millions) Book Value Approximate fair value Quoted prices in active markets for identical assets Significant observable Significant Assets Investments $ 47 $ 47 $ — $ 2 $ 45 Total assets $ 47 $ 47 $ — $ 2 $ 45 Liabilities Short-term borrowings $ 800 $ 800 $ — $ 800 $ — Current portion of long-term debt and lease obligations 3,021 3,027 3,004 23 — Long-term debt and lease obligations, excluding fair value hedges 34,269 35,647 33,575 2,072 — Total liabilities $ 38,090 $ 39,474 $ 36,579 $ 2,895 $ — The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2016 are shown in the table below: Basis of fair value measurement (in millions) Book Value Approximate fair value Quoted prices in active markets for identical assets Significant observable Significant Assets Investments $ 42 $ 42 $ — $ 5 $ 37 Total assets $ 42 $ 42 $ — $ 5 $ 37 Liabilities Short-term borrowings $ 377 $ 377 $ — $ 377 $ — Current portion of long-term debt and lease obligations 25 25 — 25 — Long-term debt and lease obligations, excluding fair value hedges 36,778 36,664 34,589 2,075 — Total liabilities $ 37,180 $ 37,066 $ 34,589 $ 2,477 $ — Investments primarily consist of cost method investments, for which the company takes into consideration recent transactions and financial information of the investee, which represents a Level 3 basis of fair value measurement. The fair values of short-term borrowings approximate the carrying values due to the short maturities of these instruments. The fair values of long-term debt, excluding fair value hedges and the term loans, were determined by using the published market price for the debt instruments, without consideration of transaction costs, which represents a Level 1 basis of fair value measurement. The fair values of the term loans were determined based on a discounted cash flow analysis using quoted market rates, which represents a Level 2 basis of fair value measurement. The counterparties to financial instruments consist of select major international financial institutions. Available-for-sale Securities Substantially all of the company’s investments in debt and equity securities were classified as available-for-sale. Debt securities classified as short-term were $549 million as of September 30, 2017 and $309 million as of December 31, 2016 . Long-term debt securities mature primarily within five years . Estimated fair values of available-for-sale securities were generally determined based on prices obtained from commercial pricing services. The following table is a summary of available-for-sale securities by type as of September 30, 2017 : Amortized Cost Gross unrealized Fair Value (in millions) Gains Losses Asset backed securities $ 904 $ 1 $ (2 ) $ 903 Corporate debt securities 1,424 4 (1 ) 1,427 Other debt securities 145 — — 145 Equity securities 18 41 (2 ) 57 Total $ 2,491 $ 46 $ (5 ) $ 2,532 The following table is a summary of available-for-sale securities by type as of December 31, 2016 : Amortized Cost Gross unrealized Fair Value (in millions) Gains Losses Asset backed securities $ 891 $ 1 $ (4 ) $ 888 Corporate debt securities 961 1 (2 ) 960 Other debt securities 127 — (1 ) 126 Equity securities 18 60 (2 ) 76 Total $ 1,997 $ 62 $ (9 ) $ 2,050 AbbVie had no other-than-temporary impairments as of September 30, 2017 . Net realized gains were $39 million for the three months and $49 million for the nine months ended September 30, 2017 . Net realized gains for the three and nine months ended September 30, 2016 were insignificant. Concentrations of Risk The functional currency of the company’s Venezuela operations is the U.S. dollar due to the hyperinflationary status of the Venezuelan economy. During the first quarter of 2016, in consideration of declining economic conditions in Venezuela and a decline in transactions settled at the official rate, AbbVie determined that its net monetary assets denominated in the Venezuelan bolivar (VEF) were no longer expected to be settled at the official rate of 10 VEF per U.S. dollar, but rather at the Divisa Complementaria (DICOM) rate. Therefore, during the first quarter of 2016, AbbVie recorded a charge of $298 million to net foreign exchange loss to revalue its bolivar-denominated net monetary assets using the DICOM rate then in effect of approximately 270 VEF per U.S. dollar. As of September 30, 2017 and December 31, 2016 , AbbVie’s net monetary assets in Venezuela were insignificant. AbbVie continues to do business with foreign governments in certain countries, including Greece, Portugal, Italy and Spain, which have historically experienced challenges in credit and economic conditions. Substantially all of AbbVie’s trade receivables in Greece, Portugal, Italy and Spain are with government health systems. Outstanding governmental receivables in these countries, net of allowances for doubtful accounts, totaled $246 million as of September 30, 2017 and $244 million as of December 31, 2016 . The company also continues to do business with foreign governments in certain oil-exporting countries that have recently experienced a deterioration in economic conditions, including Saudi Arabia and Russia, which may result in delays in the collection of receivables. Outstanding governmental receivables related to Saudi Arabia, net of allowances for doubtful accounts, were $141 million as of September 30, 2017 and $122 million as of December 31, 2016 . Outstanding governmental receivables related to Russia, net of allowances for doubtful accounts, were $142 million as of September 30, 2017 and $110 million as of December 31, 2016 . Global economic conditions and customer-specific factors may require the company to periodically re-evaluate the collectability of its receivables and the company could potentially incur credit losses. Of total net accounts receivable, three U.S. wholesalers accounted for 56% as of September 30, 2017 and 51% as of December 31, 2016 , and substantially all of AbbVie’s net revenues in the United States were to these three wholesalers. HUMIRA (adalimumab) is AbbVie’s single largest product and accounted for approximately 66% of AbbVie’s total net revenues for the nine months ended September 30, 2017 and 63% for the nine months ended September 30, 2016 . Debt and Credit Facilities Short-term borrowings included commercial paper of $800 million as of September 30, 2017 and $377 million as of December 31, 2016 . The weighted-average interest rate on commercial paper borrowings was 1.2% for the nine months ended September 30, 2017 and 0.6% for the nine months ended September 30, 2016 . |
Post-Employment Benefits
Post-Employment Benefits | 9 Months Ended |
Sep. 30, 2017 | |
Postemployment Benefits [Abstract] | |
Post-Employment Benefits | Post-Employment Benefits The following is a summary of net periodic benefit costs relating to the company’s defined benefit and other post-employment plans: Defined Other post- Three months ended Nine months ended Three months ended Nine months ended (in millions) 2017 2016 2017 2016 2017 2016 2017 2016 Service cost $ 59 $ 52 $ 176 $ 158 $ 6 $ 6 $ 19 $ 19 Interest cost 52 50 153 151 6 6 18 18 Expected return on plan assets (96 ) (88 ) (286 ) (266 ) — — — — Amortization of actuarial losses and prior service costs 27 22 80 64 1 — 1 — Net periodic benefit cost $ 42 $ 36 $ 123 $ 107 $ 13 $ 12 $ 38 $ 37 AbbVie's principal domestic defined benefit plan is the AbbVie Pension Plan. AbbVie made voluntary contributions to this plan of $150 million in both the nine months ended September 30, 2017 and 2016 . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Stock-Based Compensation Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and is summarized as follows: Three months ended Nine months ended (in millions) 2017 2016 2017 2016 Cost of products sold $ 7 $ 6 $ 20 $ 19 Research and development 30 6 127 161 Selling, general and administrative 34 35 141 141 Pre-tax compensation expense 71 47 288 321 Tax benefit 20 13 85 83 After-tax compensation expense $ 51 $ 34 $ 203 $ 238 Stock Options During the nine months ended September 30, 2017 , primarily in connection with the company's annual grant, AbbVie granted 1.2 million stock options with a weighted-average grant-date fair value of $9.80 . As of September 30, 2017 , $20 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years . RSAs, RSUs and Performance Shares During the nine months ended September 30, 2017 , primarily in connection with the company's annual grant, AbbVie granted 6.1 million RSUs and performance shares with a weighted-average grant-date fair value of $61.68 . As of September 30, 2017 , $292 million of unrecognized compensation cost related to RSAs, RSUs and performance shares is expected to be recognized as expense over approximately the next two years . Cash Dividends The following table summarizes quarterly cash dividends declared during 2017 and 2016 : 2017 2016 Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share 10/27/17 02/15/18 $ 0.71 10/28/16 02/15/17 $ 0.64 09/08/17 11/15/17 $ 0.64 09/09/16 11/15/16 $ 0.57 06/22/17 08/15/17 $ 0.64 06/16/16 08/15/16 $ 0.57 02/16/17 05/15/17 $ 0.64 02/18/16 05/16/16 $ 0.57 Stock Repurchase Program On February 16, 2017, AbbVie's board of directors authorized a $5.0 billion increase to AbbVie's existing stock repurchase program. 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. Shares repurchased under this program are recorded at acquisition cost, including related expenses, and are available for general corporate purposes. AbbVie repurchased approximately 7.8 million shares in the open market for $500 million during the nine months ended September 30, 2017 . During the nine months ended September 30, 2017 , AbbVie cash-settled $285 million of its open market purchases made at the end of 2016. AbbVie's remaining stock repurchase authorization was $4.5 billion as of September 30, 2017 . Accumulated Other Comprehensive Loss The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2017 : (in millions) Foreign Net investment hedging activities Pension and post- Marketable security activities Cash flow hedging Total Balance as of December 31, 2016 $ (1,435 ) $ 140 $ (1,513 ) $ 46 $ 176 $ (2,586 ) Other comprehensive income (loss) before reclassifications 602 (307 ) (37 ) 31 (229 ) 60 Net losses (gains) reclassified from accumulated other comprehensive loss — — 58 (49 ) (96 ) (87 ) Net current-period other comprehensive income (loss) 602 (307 ) 21 (18 ) (325 ) (27 ) Balance as of September 30, 2017 $ (833 ) $ (167 ) $ (1,492 ) $ 28 $ (149 ) $ (2,613 ) Other comprehensive income for the nine months ended September 30, 2017 included foreign currency translation adjustments totaling a gain of $602 million , which was principally due to the impact of the improvement in the Euro in the nine months ended September 30, 2017 on the translation of the company’s assets denominated in the Euro. The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2016 : (in millions) Foreign Pension and post- Marketable security activities Cash flow hedging Total Balance as of December 31, 2015 $ (1,270 ) $ (1,378 ) $ 47 $ 40 $ (2,561 ) Other comprehensive income before reclassifications 164 7 23 13 207 Net losses (gains) reclassified from accumulated other comprehensive loss — 41 (4 ) (23 ) 14 Net current-period other comprehensive income (loss) 164 48 19 (10 ) 221 Balance as of September 30, 2016 $ (1,106 ) $ (1,330 ) $ 66 $ 30 $ (2,340 ) Other comprehensive income for the nine months ended September 30, 2016 included foreign currency translation adjustments totaling a gain of $164 million , which was principally due to the impact of the improvement in the Euro and Japanese yen in the nine months ended September 30, 2016 on the translation of the company’s assets denominated in the Euro and Japanese yen. The table below presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of AOCI: Three months ended Nine months ended (in millions) (brackets denote gains) 2017 2016 2017 2016 Pension and post-employment benefits Amortization of actuarial losses and other (a) $ 28 $ 22 $ 81 $ 64 Tax benefit (8 ) (8 ) (23 ) (23 ) Total reclassifications, net of tax $ 20 $ 14 $ 58 $ 41 Cash flow hedging activities Gains on designated cash flow hedges (b) $ (38 ) $ (2 ) $ (101 ) $ (21 ) Tax expense (benefit) — (2 ) 5 (2 ) Total reclassifications, net of tax $ (38 ) $ (4 ) $ (96 ) $ (23 ) (a) Amounts are included in the computation of net periodic benefit cost (see Note 9). (b) Amounts are included in cost of products sold (see Note 8). |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate was 22% for the three months and 20% for the nine months ended September 30, 2017 and 21% for the three months and 22% for the nine months ended September 30, 2016 . The effective tax rate in each period differed from the statutory tax rate principally due to the benefit from foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax exemptions and incentives in Puerto Rico and other foreign tax jurisdictions and business development activities together with the cost of repatriation decisions. The change in the effective tax rate for the three and nine months ended September 30, 2017 over the prior year was principally due to changes in the jurisdictional mix of earnings, as well as certain discrete factors and events, including collaborations, the impact of the prior year non-deductible devaluation loss related to Venezuela and the impact of the adoption of ASU No. 2016-09, which changed the accounting treatment for excess tax benefits associated with stock-based awards. See Note 1 for additional information related to the adoption of this accounting pronouncement. 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 by up to $246 million . At the time of separation, AbbVie and Abbott Laboratories (Abbott) entered into a tax sharing agreement 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 Contingen
Legal Proceedings and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Contingencies | Legal Proceedings and Contingencies AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation was approximately $215 million as of September 30, 2017 and $225 million as of December 31, 2016 . Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows. Subject to certain exceptions specified in the separation agreement by and between Abbott and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters. Several pending lawsuits filed against Unimed Pharmaceuticals, Inc., Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) and others are consolidated for pre-trial purposes in the United States District Court for the Northern District of Georgia under the Multi-District Litigation (MDL) Rules as In re: AndroGel Antitrust Litigation , MDL No. 2084. These cases, brought by private plaintiffs and the Federal Trade Commission (FTC), generally allege Solvay's patent litigation involving AndroGel was sham litigation and the 2006 patent litigation settlement agreements and related agreements with three generic companies violate federal antitrust laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. These cases include: (a) four individual plaintiff lawsuits; (b) three purported class actions; and (c) Federal Trade Commission v. Actavis, Inc. et al. Following the district court's dismissal of all plaintiffs' claims, appellate proceedings led to the reinstatement of the claims regarding the patent litigation settlements, which are proceeding in the district court. Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie) and a generic company violates federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. The lawsuits consist of four individual plaintiff lawsuits and two consolidated purported class actions: one brought by three named direct purchasers of Niaspan and the other brought by ten named end-payor purchasers of Niaspan. The cases are consolidated for pre-trial proceedings in the United States District Court for the Eastern District of Pennsylvania under the MDL Rules as In re: Niaspan Antitrust Litigation , MDL No. 2460. In October 2016, the State of California filed a lawsuit regarding the Niaspan patent litigation settlement in Orange County Superior Court, asserting a claim under the unfair competition provision of the California Business and Professions Code seeking injunctive relief, restitution, civil penalties and attorneys’ fees. In September 2014, the FTC filed suit in the United States District Court for the Eastern District of Pennsylvania against AbbVie and others, alleging that the 2011 patent litigation with two generic companies regarding AndroGel was sham litigation and the patent litigation settlement with one of those generic companies violates federal antitrust laws. The FTC's complaint seeks monetary damages and injunctive relief. In May 2015, the court dismissed the FTC's claim regarding the patent litigation settlement. In March 2015, the State of Louisiana filed a lawsuit, State of Louisiana v. Fournier Industrie et Sante, et al. , against AbbVie, Abbott and affiliated Abbott entities in Louisiana state court. Plaintiff alleges that patent applications and patent litigation filed and other alleged conduct from the early 2000's and before related to the drug TriCor violated Louisiana State antitrust and unfair trade practices laws. The lawsuit seeks monetary damages and attorneys' fees. In August 2015, the court dismissed the case as time-barred. In December 2016, the appellate court for the state’s appeal remanded for the trial court to determine whether the state is a proper party in interest. On remand, the trial court denied AbbVie’s motion to dismiss. 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 February 2017, the court dismissed this lawsuit with prejudice and in October 2017, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal. In November 2014, a putative class action lawsuit, Medical Mutual of Ohio v. AbbVie Inc., et al. , was filed against several manufacturers of testosterone replacement therapies (TRTs), including AbbVie, in the United States District Court for the Northern District of Illinois on behalf of all insurance companies, health benefit providers, and other third party payors who paid for TRTs, including AndroGel. The claims asserted include violations of the federal RICO Act and state consumer fraud and deceptive trade practices laws. The complaint seeks monetary damages and injunctive relief. A similar lawsuit, Allied Services Division Welfare Fund v. AbbVie Inc., et al. , filed in the same court in October 2015 on behalf of the same putative class members and a putative class of consumers, was voluntarily dismissed in September 2017. Product liability cases are pending in which plaintiffs generally allege that AbbVie and other manufacturers of TRTs did not adequately warn about risks of certain injuries, primarily heart attacks, strokes and blood clots. Approximately 4,300 claims are consolidated for pre-trial purposes in the United States District Court for the Northern District of Illinois under the MDL Rules as In re: Testosterone Replacement Therapy Products Liability Litigation , MDL No. 2545. Approximately 210 claims are pending in various state courts. Plaintiffs generally seek compensatory and punitive damages. In July 2017, a jury in the United States District Court for the Northern District of Illinois reached a verdict in the first case to be tried. The jury found for AbbVie on the plaintiff's strict liability and negligence claims and for the plaintiff on the plaintiff's fraud claim, but awarded no compensatory damages. The jury's award of $150 million in punitive damages without an underlying compensatory damage award will be subject to post-trial briefing. AbbVie expects the punitive damage award will not stand. In August 2017, a jury in the Circuit Court of Cook County, Illinois, reached a verdict for AbbVie on all claims. In October 2017, a jury in the United States District Court for the Northern District of Illinois reached a verdict for AbbVie on strict liability but for the plaintiff on remaining claims and awarded $140,000 in compensatory damages and $140 million in punitive damages, which will be the subject of post-trial proceedings. Product liability cases are pending in which plaintiffs generally allege that AbbVie did not adequately warn about risk of certain injuries, primarily various birth defects, arising from use of Depakote. Over ninety percent of the approximately 625 claims are pending in the United States District Court for the Southern District of Illinois, and the rest are pending in various other federal and state courts. Plaintiffs generally seek compensatory and punitive damages. In November 2014, five individuals filed a putative class action lawsuit, Rubinstein, et al. v Gonzalez, et al., on behalf of purchasers and sellers of certain Shire plc (Shire) securities between June 20 and October 14, 2014, against AbbVie and its chief executive officer in the United States District Court for the Northern District of Illinois alleging that the defendants made and/or are responsible for material misstatements in violation of federal securities laws in connection with AbbVie's proposed transaction with Shire. In June 2016, a lawsuit, Elliott Associates, L.P., et al. v. AbbVie Inc. , was filed by five investment funds against AbbVie in the Cook County, Illinois Circuit Court alleging that AbbVie made misrepresentations and omissions in connec tion with its proposed t ransaction with Shire. Similar lawsuits were filed between July and September 2017 against AbbVie and in some instances its chief executive officer in the same court by twelve additional investment funds. Plaintiffs seek compensatory and punitive damages. In May 2017, a shareholder derivative lawsuit, Ellis v. Gonzalez, et al. , was filed in Delaware Chancery Court, alleging that AbbVie's directors breached their fiduciary duties in connection with statements made regarding the Shire transaction. The lawsuit seeks unspecified compensatory damages for AbbVie, among other relief. Beginning in May 2016, the Patent Trial & Appeal Board of the U.S. Patent & Trademark Office (PTO) instituted five inter partes review proceedings brought by Coherus Biosciences and Boehringer Ingelheim related to three AbbVie patents covering methods of treatment of rheumatoid arthritis using adalimumab. In these proceedings, the PTO reviewed the validity of the patents and issued decisions of invalidity in May, June and July of 2017. AbbVie’s appeal of the decisions is pending in the Court of Appeals for the Federal Circuit. AbbVie is seeking to enforce certain patent rights related to adalimumab (a drug AbbVie sells under the trademark HUMIRA®). In a case filed in United States District Court for the District of Delaware in August 2016, AbbVie alleged that Amgen Inc.’s and Amgen Manufacturing, Limited’s proposed biosimilar adalimumab product infringed certain AbbVie patents. AbbVie sought declaratory and injunctive relief. In September 2017, the parties settled this case and it was dismissed without prejudice. In March 2017, AbbVie filed a lawsuit, AbbVie Inc. v. Novartis Vaccines and Diagnostics, Inc. and Grifols Worldwide Operations Ltd., in the United States District Court for the Northern District of California against Novartis Vaccines and Grifols Worldwide seeking a declaratory judgment that eleven HCV-related patents licensed to AbbVie in 2002 are invalid. AbbVie is seeking to enforce certain patent rights related to adalimumab (a drug AbbVie sells under the trademark HUMIRA®). In a case filed in United States District Court for the District of Delaware in August 2017, AbbVie alleges that Boehringer Ingelheim International GmbH’s, Boehringer Ingelheim Pharmaceutical, Inc.’s, and Boehringer Ingelheim Fremont, Inc.’s proposed biosimilar adalimumab product infringes certain AbbVie patents. AbbVie seeks declaratory and injunctive relief. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information AbbVie operates in one business segment—pharmaceutical products. The following table details AbbVie’s worldwide net revenues: Three months ended Nine months ended (in millions) 2017 2016 2017 2016 HUMIRA $ 4,701 $ 4,060 $ 13,535 $ 11,786 IMBRUVICA 688 501 1,865 1,321 HCV 276 378 764 1,211 Lupron 201 193 605 602 Creon 215 187 596 517 Synagis 116 96 456 460 Synthroid 191 188 576 558 AndroGel 147 174 437 501 Kaletra 85 137 310 416 Sevoflurane 100 102 311 327 Duodopa 94 74 255 215 All other 181 342 767 928 Total net revenues $ 6,995 $ 6,432 $ 20,477 $ 18,842 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The standard provides clarifying guidance to assist in the evaluation of whether transactions are treated as business combinations or asset acquisitions. AbbVie elected to early adopt the changes prospectively in the first quarter of 2017. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . AbbVie adopted the standard in the first quarter of 2017. As a result, all excess tax benefits associated with stock-based awards are recognized in the statement of earnings when the awards vest or settle, rather than in stockholders' equity. In addition, excess tax benefits in the statement of cash flows are now classified as an operating activity rather than as a financing activity. AbbVie adopted these changes prospectively. Accordingly, the company recognized excess tax benefits in income tax expense of $14 million for the three months and $53 million for the nine months ended September 30, 2017 and classified them within cash flows from operating activities. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40) . The amendments in this standard supersede most current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. AbbVie can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) modified retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. AbbVie will adopt the standard effective the first quarter of 2018 and apply the amendments using the modified retrospective method. The company has made substantial progress in its review of the new standard and will complete its assessment by December 31, 2017. AbbVie does not expect significant changes to the amounts or timing of revenue recognition for product sales, which is its primary revenue stream. However, the company expects that the adoption of the new standard will require a cumulative-effect adjustment to retained earnings on January 1, 2018 of approximately $130 million , net of tax, primarily related to certain deferred license revenues that were originally expected to be recognized through early 2020. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The standard requires several targeted changes including that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net earnings. These provisions will not impact the accounting for AbbVie's investments in debt securities. The new guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. Amendments are to be applied as a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. This standard will be effective for AbbVie starting with the first quarter of 2018. The standard does not permit early adoption with the exception of certain targeted provisions. AbbVie is unable to estimate the impact of adopting this standard on its financial statements as it will be dependent upon the composition of its equity investment portfolio as of the adoption date and future changes in fair value subsequent to the adoption date. However, based on historical trends, AbbVie does not believe the adoption will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The standard outlines a comprehensive lease accounting model that supersedes the current lease guidance and requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. The guidance also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new standard must be adopted using the modified retrospective approach and will be effective for AbbVie starting with the first quarter of 2019, with early adoption permitted. AbbVie will adopt the standard effective in the first quarter of 2019 and is currently assessing the impact of adopting this guidance on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) . The standard changes how credit losses are measured for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, the standard requires the use of a new forward-looking "expected credit loss" model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. Additionally, the standard requires new disclosures and will be effective for AbbVie starting with the first quarter of 2020. Early adoption beginning in the first quarter of 2019 is permitted. With certain exceptions, adjustments are to be applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact to retained earnings as of the beginning of the fiscal year of adoption. AbbVie is currently assessing the impact and timing of adopting this guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) . The new standard requires entities to recognize the income tax consequences of an intercompany transfer of an asset other than inventory when the transfer occurs. Under current U.S. GAAP, the income tax consequences of these intercompany asset transfers are deferred until the asset is sold to a third party or otherwise recovered through use. The standard will be effective for AbbVie starting with the first quarter of 2018. Adjustments for this update are to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings with any adjustments reflected as of the beginning of the fiscal year of adoption. AbbVie is currently assessing the impact of adopting this guidance on its consolidated financial statements. As of September 30, 2017 , AbbVie had approximately $1.8 billion of prepaid income tax assets that will be affected by this standard, of which $1.3 billion was included in prepaid expenses and other on the condensed consolidated balance sheet. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The standard requires that an employer continue to report the service cost component of net periodic benefit cost in the same income statement line item or items as other employee compensation costs arising from services rendered during the period. The other components of net periodic benefit cost are required to be presented separately outside of income from operations and are not eligible for capitalization. The standard will be effective for AbbVie starting with the first quarter of 2018. Upon adoption, the company will apply the income statement classification provisions of this standard retrospectively and preliminarily expects to reclassify income of approximately $50 million from operating earnings to non-operating income for the year ending December 31, 2017. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The standard simplifies the application of hedge accounting and more closely aligns the accounting with an entity’s risk management activities. The standard will be effective for AbbVie starting with the first quarter of 2019, with early adoption permitted. AbbVie is currently assessing the impact and timing of adopting this guidance on its consolidated financial statements. |
Supplemental Financial Inform22
Supplemental Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Financial Information | |
Schedule of interest expense, net | Interest Expense, Net Three months ended Nine months ended (in millions) 2017 2016 2017 2016 Interest expense $ 293 $ 271 $ 851 $ 731 Interest income (41 ) (21 ) (99 ) (56 ) Interest expense, net $ 252 $ 250 $ 752 $ 675 |
Schedule of inventories | Inventories (in millions) September 30, 2017 December 31, 2016 Finished goods $ 353 $ 223 Work-in-process 1,271 1,080 Raw materials 161 141 Inventories $ 1,785 $ 1,444 |
Schedule of property and equipment | Property and Equipment (in millions) September 30, 2017 December 31, 2016 Property and equipment, gross $ 7,894 $ 7,526 Accumulated depreciation (5,197 ) (4,922 ) Property and equipment, net $ 2,697 $ 2,604 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of diluted earnings per share, impact of two-class method | The following table summarizes the impact of the two-class method: Three months ended Nine months ended (in millions, except per share information) 2017 2016 2017 2016 Basic EPS Net earnings $ 1,631 $ 1,598 $ 5,257 $ 4,562 Earnings allocated to participating securities 8 8 26 23 Earnings available to common shareholders $ 1,623 $ 1,590 $ 5,231 $ 4,539 Weighted-average basic shares outstanding 1,597 1,632 1,596 1,624 Basic earnings per share $ 1.02 $ 0.97 $ 3.28 $ 2.79 Diluted EPS Net earnings $ 1,631 $ 1,598 $ 5,257 $ 4,562 Earnings allocated to participating securities 8 8 26 23 Earnings available to common shareholders $ 1,623 $ 1,590 $ 5,231 $ 4,539 Weighted-average shares of common stock outstanding 1,597 1,632 1,596 1,624 Effect of dilutive securities 6 8 6 9 Weighted-average diluted shares outstanding 1,603 1,640 1,602 1,633 Diluted earnings per share $ 1.01 $ 0.97 $ 3.27 $ 2.78 |
Licensing, Acquisitions, and 24
Licensing, Acquisitions, and Other Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of consideration paid | The following table summarizes total consideration: (in millions) Cash $ 595 Deferred consideration payable 18 Contingent consideration 3,365 Total consideration $ 3,978 The following table summarizes total consideration: (in millions) Cash $ 1,883 Fair value of AbbVie common stock 3,923 Contingent consideration 620 Total consideration $ 6,426 |
Schedule of assets acquired and liabilities assumed | The following table summarizes fair values of assets acquired as of the April 1, 2016 acquisition date: (in millions) Assets acquired Identifiable intangible assets - Indefinite-lived research and development $ 3,890 Goodwill 88 Total assets acquired $ 3,978 The following table summarizes fair values of assets acquired and liabilities assumed as of the June 1, 2016 acquisition date: (in millions) Assets acquired and liabilities assumed Accounts receivable $ 1 Prepaid expenses and other 7 Property and equipment 17 Intangible assets - Indefinite-lived research and development 6,100 Accounts payable and accrued liabilities (31 ) Deferred income taxes (1,933 ) Other long-term liabilities (7 ) Total identifiable net assets 4,154 Goodwill 2,272 Total assets acquired and liabilities assumed $ 6,426 |
Schedule of proforma results of operations | The following table presents the unaudited pro forma combined results of operations of AbbVie and Stemcentrx for the three and nine months ended September 30, 2016 as if the acquisition of Stemcentrx had occurred on January 1, 2015: Three months ended Nine months ended (in millions, except per share information) 2016 2016 Net revenues $ 6,432 $ 18,845 Net earnings 1,579 4,515 Basic earnings per share $ 0.97 $ 2.72 Diluted earnings per share $ 0.96 $ 2.71 |
Collaboration with Janssen Bi25
Collaboration with Janssen Biotech, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Collaboration with Janssen Biotech, Inc. | |
Schedule of profit and cost sharing relationship | The following table shows the profit and cost sharing relationship between Janssen and AbbVie: Three months ended Nine months ended (in millions) 2017 2016 2017 2016 United States - Janssen's share of profits (included in cost of products sold) $ 268 $ 211 $ 727 $ 540 International - AbbVie's share of profits (included in net revenues) 114 64 306 175 Global - AbbVie's share of other costs (included in respective line items) 75 70 209 195 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in the carrying amount of goodwill | The following table summarizes the changes in the carrying amount of goodwill: (in millions) Balance as of December 31, 2016 $ 15,416 Foreign currency translation adjustments 332 Balance as of September 30, 2017 $ 15,748 |
Summary of definite-lived intangible assets | The following table summarizes intangible assets: September 30, 2017 December 31, 2016 (in millions) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets Developed product rights $ 16,456 $ (4,805 ) $ 11,651 $ 16,464 $ (4,256 ) $ 12,208 License agreements 7,869 (1,343 ) 6,526 7,809 (1,110 ) 6,699 Total definite-lived intangible assets 24,325 (6,148 ) 18,177 24,273 (5,366 ) 18,907 Indefinite-lived research and development 9,990 — 9,990 9,990 — 9,990 Total intangible assets, net $ 34,315 $ (6,148 ) $ 28,167 $ 34,263 $ (5,366 ) $ 28,897 |
Summary of indefinite-lived intangible assets | The following table summarizes intangible assets: September 30, 2017 December 31, 2016 (in millions) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets Developed product rights $ 16,456 $ (4,805 ) $ 11,651 $ 16,464 $ (4,256 ) $ 12,208 License agreements 7,869 (1,343 ) 6,526 7,809 (1,110 ) 6,699 Total definite-lived intangible assets 24,325 (6,148 ) 18,177 24,273 (5,366 ) 18,907 Indefinite-lived research and development 9,990 — 9,990 9,990 — 9,990 Total intangible assets, net $ 34,315 $ (6,148 ) $ 28,167 $ 34,263 $ (5,366 ) $ 28,897 |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of the cash activity in the restructuring reserve | The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, 2017 : (in millions) Accrued balance as of December 31, 2016 $ 87 Restructuring charges 34 Payments and other adjustments (65 ) Accrued balance as of September 30, 2017 $ 56 |
Financial Instruments and Fai28
Financial Instruments and Fair Value Measures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of the amounts and location of derivatives | The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets: Fair value – Fair value – (in millions) Balance sheet caption September 30, December 31, 2016 Balance sheet caption September 30, December 31, 2016 Foreign currency forward exchange contracts Designated as cash flow hedges Prepaid expenses and other $ 1 $ 170 Accounts payable and accrued liabilities $ 150 $ 5 Designated as cash flow hedges Other assets — — Other long-term liabilities 6 — Not designated as hedges Prepaid expenses and other 52 55 Accounts payable and accrued liabilities 47 33 Interest rate swaps designated as fair value hedges Other assets — — Other long-term liabilities 295 338 Total derivatives $ 53 $ 225 $ 498 $ 376 |
Summary of the impact of effective portions of derivatives | The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income/(loss): Three months ended Nine months ended (in millions) 2017 2016 2017 2016 Foreign currency forward exchange contracts $ (114 ) $ (5 ) $ (253 ) $ 7 |
Schedule of location and amount of gain/(loss) recognized for derivatives | The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings, including the effective portions of the net gains (losses) reclassified out of AOCI into net earnings. See Note 10 for the amount of net gains (losses) reclassified out of AOCI. Three months ended Nine months ended (in millions) Statement of earnings caption 2017 2016 2017 2016 Foreign currency forward exchange contracts Designated as cash flow hedges Cost of products sold $ 38 $ 4 $ 101 $ 23 Not designated as hedges Net foreign exchange loss (17 ) (15 ) (88 ) (122 ) Non-designated treasury rate lock agreements Other expense, net — — — (12 ) Interest rate swaps designated as fair value hedges Interest expense, net 11 (49 ) 43 321 Total $ 32 $ (60 ) $ 56 $ 210 |
Summary of the bases used to measure assets and liabilities carried at fair value | The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of September 30, 2017 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical Significant Significant Assets Cash and equivalents $ 8,446 $ 669 $ 7,777 $ — Time deposits 500 — 500 — Debt securities 2,475 — 2,475 — Equity securities 57 57 — — Foreign currency contracts 53 — 53 — Total assets $ 11,531 $ 726 $ 10,805 $ — Liabilities Interest rate hedges $ 295 $ — $ 295 $ — Foreign currency contracts 203 — 203 — Contingent consideration 4,455 — — 4,455 Total liabilities $ 4,953 $ — $ 498 $ 4,455 The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of December 31, 2016 : Basis of fair value measurement (in millions) Total Quoted prices in active markets for identical Significant Significant Assets Cash and equivalents $ 5,100 $ 1,191 $ 3,909 $ — Time deposits 1,014 — 1,014 — Debt securities 1,974 — 1,974 — Equity securities 76 76 — — Foreign currency contracts 225 — 225 — Total assets $ 8,389 $ 1,267 $ 7,122 $ — Liabilities Interest rate hedges $ 338 $ — $ 338 $ — Foreign currency contracts 38 — 38 — Contingent consideration 4,213 — — 4,213 Total liabilities $ 4,589 $ — $ 376 $ 4,213 |
Schedule of reconciliation of the fair value measurements | The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level 3 inputs: Nine months ended (in millions) 2017 2016 Beginning balance $ 4,213 $ — Additions (see Note 4) — 3,985 Change in fair value recognized in net earnings 547 143 Milestone payments (305 ) — Ending balance $ 4,455 $ 4,128 |
Schedule of the carrying values and fair values of certain financial instruments | The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2017 are shown in the table below: Basis of fair value measurement (in millions) Book Value Approximate fair value Quoted prices in active markets for identical assets Significant observable Significant Assets Investments $ 47 $ 47 $ — $ 2 $ 45 Total assets $ 47 $ 47 $ — $ 2 $ 45 Liabilities Short-term borrowings $ 800 $ 800 $ — $ 800 $ — Current portion of long-term debt and lease obligations 3,021 3,027 3,004 23 — Long-term debt and lease obligations, excluding fair value hedges 34,269 35,647 33,575 2,072 — Total liabilities $ 38,090 $ 39,474 $ 36,579 $ 2,895 $ — The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2016 are shown in the table below: Basis of fair value measurement (in millions) Book Value Approximate fair value Quoted prices in active markets for identical assets Significant observable Significant Assets Investments $ 42 $ 42 $ — $ 5 $ 37 Total assets $ 42 $ 42 $ — $ 5 $ 37 Liabilities Short-term borrowings $ 377 $ 377 $ — $ 377 $ — Current portion of long-term debt and lease obligations 25 25 — 25 — Long-term debt and lease obligations, excluding fair value hedges 36,778 36,664 34,589 2,075 — Total liabilities $ 37,180 $ 37,066 $ 34,589 $ 2,477 $ — |
Schedule of available-for-sale securities by type | The following table is a summary of available-for-sale securities by type as of September 30, 2017 : Amortized Cost Gross unrealized Fair Value (in millions) Gains Losses Asset backed securities $ 904 $ 1 $ (2 ) $ 903 Corporate debt securities 1,424 4 (1 ) 1,427 Other debt securities 145 — — 145 Equity securities 18 41 (2 ) 57 Total $ 2,491 $ 46 $ (5 ) $ 2,532 The following table is a summary of available-for-sale securities by type as of December 31, 2016 : Amortized Cost Gross unrealized Fair Value (in millions) Gains Losses Asset backed securities $ 891 $ 1 $ (4 ) $ 888 Corporate debt securities 961 1 (2 ) 960 Other debt securities 127 — (1 ) 126 Equity securities 18 60 (2 ) 76 Total $ 1,997 $ 62 $ (9 ) $ 2,050 |
Post-Employment Benefits (Table
Post-Employment Benefits (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Postemployment Benefits [Abstract] | |
Summary of net periodic benefit costs | The following is a summary of net periodic benefit costs relating to the company’s defined benefit and other post-employment plans: Defined Other post- Three months ended Nine months ended Three months ended Nine months ended (in millions) 2017 2016 2017 2016 2017 2016 2017 2016 Service cost $ 59 $ 52 $ 176 $ 158 $ 6 $ 6 $ 19 $ 19 Interest cost 52 50 153 151 6 6 18 18 Expected return on plan assets (96 ) (88 ) (286 ) (266 ) — — — — Amortization of actuarial losses and prior service costs 27 22 80 64 1 — 1 — Net periodic benefit cost $ 42 $ 36 $ 123 $ 107 $ 13 $ 12 $ 38 $ 37 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Summary of share-based compensation expense | Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and is summarized as follows: Three months ended Nine months ended (in millions) 2017 2016 2017 2016 Cost of products sold $ 7 $ 6 $ 20 $ 19 Research and development 30 6 127 161 Selling, general and administrative 34 35 141 141 Pre-tax compensation expense 71 47 288 321 Tax benefit 20 13 85 83 After-tax compensation expense $ 51 $ 34 $ 203 $ 238 |
Summary of quarterly cash dividends | The following table summarizes quarterly cash dividends declared during 2017 and 2016 : 2017 2016 Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share 10/27/17 02/15/18 $ 0.71 10/28/16 02/15/17 $ 0.64 09/08/17 11/15/17 $ 0.64 09/09/16 11/15/16 $ 0.57 06/22/17 08/15/17 $ 0.64 06/16/16 08/15/16 $ 0.57 02/16/17 05/15/17 $ 0.64 02/18/16 05/16/16 $ 0.57 |
Summary of changes in balances of each component of accumulated other comprehensive loss | The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2017 : (in millions) Foreign Net investment hedging activities Pension and post- Marketable security activities Cash flow hedging Total Balance as of December 31, 2016 $ (1,435 ) $ 140 $ (1,513 ) $ 46 $ 176 $ (2,586 ) Other comprehensive income (loss) before reclassifications 602 (307 ) (37 ) 31 (229 ) 60 Net losses (gains) reclassified from accumulated other comprehensive loss — — 58 (49 ) (96 ) (87 ) Net current-period other comprehensive income (loss) 602 (307 ) 21 (18 ) (325 ) (27 ) Balance as of September 30, 2017 $ (833 ) $ (167 ) $ (1,492 ) $ 28 $ (149 ) $ (2,613 ) The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2016 : (in millions) Foreign Pension and post- Marketable security activities Cash flow hedging Total Balance as of December 31, 2015 $ (1,270 ) $ (1,378 ) $ 47 $ 40 $ (2,561 ) Other comprehensive income before reclassifications 164 7 23 13 207 Net losses (gains) reclassified from accumulated other comprehensive loss — 41 (4 ) (23 ) 14 Net current-period other comprehensive income (loss) 164 48 19 (10 ) 221 Balance as of September 30, 2016 $ (1,106 ) $ (1,330 ) $ 66 $ 30 $ (2,340 ) |
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive loss | The table below presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of AOCI: Three months ended Nine months ended (in millions) (brackets denote gains) 2017 2016 2017 2016 Pension and post-employment benefits Amortization of actuarial losses and other (a) $ 28 $ 22 $ 81 $ 64 Tax benefit (8 ) (8 ) (23 ) (23 ) Total reclassifications, net of tax $ 20 $ 14 $ 58 $ 41 Cash flow hedging activities Gains on designated cash flow hedges (b) $ (38 ) $ (2 ) $ (101 ) $ (21 ) Tax expense (benefit) — (2 ) 5 (2 ) Total reclassifications, net of tax $ (38 ) $ (4 ) $ (96 ) $ (23 ) (a) Amounts are included in the computation of net periodic benefit cost (see Note 9). (b) Amounts are included in cost of products sold (see Note 8). |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of worldwide net revenues | AbbVie operates in one business segment—pharmaceutical products. The following table details AbbVie’s worldwide net revenues: Three months ended Nine months ended (in millions) 2017 2016 2017 2016 HUMIRA $ 4,701 $ 4,060 $ 13,535 $ 11,786 IMBRUVICA 688 501 1,865 1,321 HCV 276 378 764 1,211 Lupron 201 193 605 602 Creon 215 187 596 517 Synagis 116 96 456 460 Synthroid 191 188 576 558 AndroGel 147 174 437 501 Kaletra 85 137 310 416 Sevoflurane 100 102 311 327 Duodopa 94 74 255 215 All other 181 342 767 928 Total net revenues $ 6,995 $ 6,432 $ 20,477 $ 18,842 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Effect of excess tax benefits within cash flows from operating | $ 7,376 | $ 5,500 | ||
Effect of excess tax benefits within cash flows from financing | 3,584 | $ 1,426 | ||
Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect adjustment to retained earnings, net of tax | $ 130 | 130 | ||
Accounting Standards Update 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid income tax assets | 1,800 | 1,800 | ||
Accounting Standards Update 2016-16 | Prepaid Expenses and Other | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid income tax assets | 1,300 | 1,300 | ||
Accounting Standards Update 2017-07 | Scenario, Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Expected reduction in operating earnings | $ 50 | |||
Accounting Standards Update 2017-07 | Other Expense | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Expected reduction in operating earnings | 50 | |||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Effect of excess tax benefits within cash flows from operating | 14 | 53 | ||
Effect of excess tax benefits within cash flows from financing | $ 14 | $ 53 |
Supplemental Financial Inform33
Supplemental Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Interest Expense, Net | |||||
Interest expense | $ 293 | $ 271 | $ 851 | $ 731 | |
Interest income | (41) | (21) | (99) | (56) | |
Interest expense, net | 252 | 250 | 752 | 675 | |
Inventories | |||||
Finished goods | 353 | 353 | $ 223 | ||
Work-in-process | 1,271 | 1,271 | 1,080 | ||
Raw materials | 161 | 161 | 141 | ||
Inventories | 1,785 | 1,785 | 1,444 | ||
Property and Equipment | |||||
Property and equipment, gross | 7,894 | 7,894 | 7,526 | ||
Accumulated depreciation | (5,197) | (5,197) | (4,922) | ||
Property and equipment, net | 2,697 | 2,697 | $ 2,604 | ||
Depreciation expense | $ 111 | $ 96 | $ 324 | $ 307 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic EPS | ||||
Net earnings | $ 1,631 | $ 1,598 | $ 5,257 | $ 4,562 |
Earnings allocated to participating securities | 8 | 8 | 26 | 23 |
Earnings available to common shareholders | $ 1,623 | $ 1,590 | $ 5,231 | $ 4,539 |
Weighted-average basic shares outstanding (in shares) | 1,597 | 1,632 | 1,596 | 1,624 |
Basic earnings per share (in dollars per share) | $ 1.02 | $ 0.97 | $ 3.28 | $ 2.79 |
Diluted EPS | ||||
Net earnings | $ 1,631 | $ 1,598 | $ 5,257 | $ 4,562 |
Earnings allocated to participating securities | 8 | 8 | 26 | 23 |
Earnings available to common shareholders | $ 1,623 | $ 1,590 | $ 5,231 | $ 4,539 |
Weighted-average basic shares outstanding (in shares) | 1,597 | 1,632 | 1,596 | 1,624 |
Effect of dilutive securities (in shares) | 6 | 8 | 6 | 9 |
Weighted-average diluted shares outstanding (in shares) | 1,603 | 1,640 | 1,602 | 1,633 |
Diluted earnings per share (in dollars per share) | $ 1.01 | $ 0.97 | $ 3.27 | $ 2.78 |
Licensing, Acquisitions, and 35
Licensing, Acquisitions, and Other Arrangements - Additional Information (Details) shares in Millions, $ in Millions | Jun. 01, 2016USD ($)compoundshares | Apr. 01, 2016USD ($) |
Stemcentrx | ||
Business Acquisition [Line Items] | ||
Number of early-stage clinical compounds in solid tumor indications acquired | compound | 4 | |
Shares issued as consideration (in shares) | shares | 62.4 | |
Additional payment | $ 4,000 | |
Milestone payments | $ 620 | |
Stemcentrx | IPR&D | ||
Business Acquisition [Line Items] | ||
Number of early-stage clinical compounds in solid tumor indications acquired | compound | 4 | |
BI | ||
Business Acquisition [Line Items] | ||
Initial upfront payment | $ 595 | |
Additional payment | 18 | |
Milestone payments | 606 | |
Royalty payments | 2,800 | |
BI | Maximum | ||
Business Acquisition [Line Items] | ||
Additional payment | $ 1,600 |
Licensing, Acquisitions, and 36
Licensing, Acquisitions, and Other Arrangements - Schedule of Consideration Paid (Details) - USD ($) $ in Millions | Jun. 01, 2016 | Apr. 01, 2016 |
Stemcentrx | ||
Business Acquisition [Line Items] | ||
Cash | $ 1,883 | |
Fair value of AbbVie common stock | 3,923 | |
Contingent consideration | 620 | |
Total consideration | $ 6,426 | |
BI | ||
Business Acquisition [Line Items] | ||
Cash | $ 595 | |
Deferred consideration payable | 18 | |
Contingent consideration | 3,365 | |
Total consideration | $ 3,978 |
Licensing, Acquisitions, and 37
Licensing, Acquisitions, and Other Arrangements - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 01, 2016 | Apr. 01, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 15,748 | $ 15,416 | ||
Stemcentrx | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 1 | |||
Prepaid expenses and other | 7 | |||
Property and equipment | 17 | |||
Accounts payable and accrued liabilities | (31) | |||
Deferred income taxes | (1,933) | |||
Other long-term liabilities | (7) | |||
Total identifiable net assets | 4,154 | |||
Goodwill | 2,272 | |||
Total assets acquired and liabilities assumed | 6,426 | |||
Stemcentrx | IPR&D | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 6,100 | |||
BI | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 88 | |||
Total assets acquired and liabilities assumed | 3,978 | |||
BI | IPR&D | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 3,890 |
Licensing, Acquisitions, and 38
Licensing, Acquisitions, and Other Arrangements - Proforma Results of Operations (Details) - Stemcentrx - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Net revenues | $ 6,432 | $ 18,845 |
Net earnings | $ 1,579 | $ 4,515 |
Basic earnings per share (in dollars per share) | $ 0.97 | $ 2.72 |
Diluted earnings per share (in dollars per share) | $ 0.96 | $ 2.71 |
Licensing, Acquisitions, and 39
Licensing, Acquisitions, and Other Arrangements - Other Licensing & Acquisitions Activity (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Collaborative and license agreements | |||||
Cash outflows related to other acquisitions and investments | $ 180 | $ 172 | |||
Acquired in-process research and development | $ 0 | $ 80 | $ 15 | $ 160 | |
Subsequent Event | Collaborative arrangement | Alector, Inc | |||||
Collaborative and license agreements | |||||
Initial upfront payment | $ 205 | ||||
Subsequent Event | Collaborative arrangement | Alector, Inc | Maximum | |||||
Collaborative and license agreements | |||||
Additional payment | $ 986 |
Collaboration with Janssen Bi40
Collaboration with Janssen Biotech, Inc. (Details) - Collaborative arrangement - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2011 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Collaborative and license agreements | |||||
Share of collaboration development costs responsible by the entity (as a percent) | 40.00% | ||||
Global - AbbVie's share of other costs (included in respective line items) | $ 75 | $ 70 | $ 209 | $ 195 | |
Outside of United States | |||||
Collaborative and license agreements | |||||
International - AbbVie's share of profits (included in net revenues) | 114 | 64 | 306 | 175 | |
Janssen Biotech, Inc | |||||
Collaborative and license agreements | |||||
Share of collaboration development costs responsible by Janssen (as a percent) | 60.00% | ||||
Janssen Biotech, Inc | United States | |||||
Collaborative and license agreements | |||||
United States - Janssen's share of profits (included in cost of products sold) | $ 268 | $ 211 | $ 727 | $ 540 | |
Pharmacyclics Inc | Janssen Biotech, Inc | |||||
Collaborative and license agreements | |||||
Milestone payments | $ 200 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 15,416 |
Foreign currency translation adjustments | 332 |
Goodwill, ending balance | $ 15,748 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accumulated goodwill impairment losses | $ 0 | $ 0 | ||
Amortization of intangible assets | $ 268,000,000 | $ 208,000,000 | 808,000,000 | $ 554,000,000 |
Impairment charges | 0 | 0 | ||
On-market product rights | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment charges | $ 0 | $ 39,000,000 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Summary of Intangible Assets, Net (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 24,325 | $ 24,273 |
Accumulated amortization | (6,148) | (5,366) |
Net carrying amount | 18,177 | 18,907 |
Intangible assets | ||
Indefinite-lived research and development | 9,990 | 9,990 |
Net carrying amount - Indefinite-lived research and development | 9,990 | 9,990 |
Total intangible assets gross carrying amount | 34,315 | 34,263 |
Accumulated amortization - Total intangible assets | (6,148) | (5,366) |
Total intangible assets, net | 28,167 | 28,897 |
Developed product rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 16,456 | 16,464 |
Accumulated amortization | (4,805) | (4,256) |
Net carrying amount | 11,651 | 12,208 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 7,869 | 7,809 |
Accumulated amortization | (1,343) | (1,110) |
Net carrying amount | $ 6,526 | $ 6,699 |
Restructuring Plans (Details)
Restructuring Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring reserve activity | ||||
Accrued balance beginning of the period | $ 87 | |||
Restructuring charges | $ 7 | $ 5 | 34 | $ 35 |
Payments and other adjustments | (65) | |||
Accrued balance end of the period | $ 56 | $ 56 |
Financial Instruments and Fai45
Financial Instruments and Fair Value Measures - Financial instruments (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016EUR (€) | |
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in asset position | $ 53 | $ 225 | |
Foreign currency contracts in liability position | $ 498 | 376 | |
Designated as hedging instrument | Net Investment Hedges | Senior notes | |||
Derivative instruments, notional amount and fair value | |||
Principal amount of unsecured senior notes | € | € 3,600,000,000 | ||
Designated as hedging instrument | Foreign currency forward exchange contracts | |||
Derivative instruments, notional amount and fair value | |||
Duration of forward exchange contracts | 18 months | ||
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash Flow Hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | $ 3,000 | 2,200 | |
Approximate length of time over which accumulated gains and losses will be recognized in Cost of products sold | 6 months | ||
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash Flow Hedges | Prepaid expenses and other | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in asset position | $ 1 | 170 | |
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash Flow Hedges | Other assets | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in asset position | 0 | 0 | |
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash Flow Hedges | Accounts payable and accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in liability position | 150 | 5 | |
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash Flow Hedges | Other long-term liabilities | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in liability position | 6 | 0 | |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | 11,800 | 11,800 | |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | Other assets | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in asset position | 0 | 0 | |
Designated as hedging instrument | Interest rate contracts | Fair value hedges | Other long-term liabilities | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in liability position | 295 | 338 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of derivative instruments | 7,400 | 6,600 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses and other | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in asset position | 52 | 55 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts | Accounts payable and accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Foreign currency contracts in liability position | $ 47 | $ 33 |
Financial Instruments and Fai46
Financial Instruments and Fair Value Measures - Amount Of Gain/(Loss) Recognized For Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Gain (loss) on derivatives | ||||
Derivative gain (loss), net | $ 32 | $ (60) | $ 56 | $ 210 |
Senior notes | Net Investment Hedges | Designated as hedging instrument | ||||
Gain (loss) on derivatives | ||||
Recognized pre-tax loss | 142 | 481 | ||
Foreign currency forward exchange contracts | ||||
Gain (loss) on derivatives | ||||
Gains (losses) recognized in other comprehensive income | (114) | (5) | (253) | 7 |
Foreign currency forward exchange contracts | Not designated as hedges | Net foreign exchange loss | ||||
Gain (loss) on derivatives | ||||
Derivative gain (loss), net | (17) | (15) | (88) | (122) |
Foreign currency forward exchange contracts | Cash Flow Hedges | ||||
Gain (loss) on derivatives | ||||
Pretax unrealized gains | 117 | 117 | ||
Foreign currency forward exchange contracts | Cash Flow Hedges | Designated as hedging instrument | Cost of products sold | ||||
Gain (loss) on derivatives | ||||
Derivative gain (loss), net | 38 | 4 | 101 | 23 |
Non-designated treasury rate lock agreements | Not designated as hedges | Other expense, net | ||||
Gain (loss) on derivatives | ||||
Derivative gain (loss), net | 0 | 0 | 0 | (12) |
Interest rate swaps designated as fair value hedges | Fair value hedges | Designated as hedging instrument | Interest expense, net | ||||
Gain (loss) on derivatives | ||||
Derivative gain (loss), net | $ 11 | $ (49) | $ 43 | $ 321 |
Financial Instruments and Fai47
Financial Instruments and Fair Value Measures - Fair Value Measures (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Assets | ||
Foreign currency contracts | $ 53 | $ 225 |
Liabilities | ||
Foreign currency contracts | $ 498 | 376 |
Changes Measurement | Stemcentrx and BI | Change In Assumed Discount Rate | ||
Liabilities | ||
Discount rate change | 50.00% | |
Contingent consideration liability change | $ 160 | |
Changes Measurement | Stemcentrx and BI | Change In Assumed Probability Rate | ||
Liabilities | ||
Contingent consideration liability change | $ 340 | |
Assumed probability rate change | 500.00% | |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Time deposits | $ 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 36,579 | 34,589 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Time deposits | 2 | 5 |
Total assets | 2 | 5 |
Liabilities | ||
Total liabilities | 2,895 | 2,477 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Time deposits | 45 | 37 |
Total assets | 45 | 37 |
Liabilities | ||
Total liabilities | 0 | 0 |
Recurring | ||
Assets | ||
Cash and equivalents | 8,446 | 5,100 |
Debt securities | 2,475 | 1,974 |
Equity securities | 57 | 76 |
Total assets | 11,531 | 8,389 |
Liabilities | ||
Interest rate hedges | 295 | 338 |
Contingent consideration | 4,455 | 4,213 |
Total liabilities | 4,953 | 4,589 |
Recurring | Foreign Currency Contract | ||
Assets | ||
Foreign currency contracts | 53 | 225 |
Liabilities | ||
Foreign currency contracts | 203 | 38 |
Recurring | Time deposits | ||
Assets | ||
Time deposits | 500 | 1,014 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Cash and equivalents | 669 | 1,191 |
Debt securities | 0 | 0 |
Equity securities | 57 | 76 |
Total assets | 726 | 1,267 |
Liabilities | ||
Interest rate hedges | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Foreign Currency Contract | ||
Assets | ||
Foreign currency contracts | 0 | 0 |
Liabilities | ||
Foreign currency contracts | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Time deposits | ||
Assets | ||
Time deposits | 0 | 0 |
Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Cash and equivalents | 7,777 | 3,909 |
Debt securities | 2,475 | 1,974 |
Equity securities | 0 | 0 |
Total assets | 10,805 | 7,122 |
Liabilities | ||
Interest rate hedges | 295 | 338 |
Contingent consideration | 0 | 0 |
Total liabilities | 498 | 376 |
Recurring | Significant other observable inputs (Level 2) | Foreign Currency Contract | ||
Assets | ||
Foreign currency contracts | 53 | 225 |
Liabilities | ||
Foreign currency contracts | 203 | 38 |
Recurring | Significant other observable inputs (Level 2) | Time deposits | ||
Assets | ||
Time deposits | 500 | 1,014 |
Recurring | Significant unobservable inputs (Level 3) | ||
Assets | ||
Cash and equivalents | 0 | 0 |
Debt securities | 0 | 0 |
Equity securities | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Interest rate hedges | 0 | 0 |
Contingent consideration | 4,455 | 4,213 |
Total liabilities | 4,455 | 4,213 |
Recurring | Significant unobservable inputs (Level 3) | Foreign Currency Contract | ||
Assets | ||
Foreign currency contracts | 0 | 0 |
Liabilities | ||
Foreign currency contracts | 0 | 0 |
Recurring | Significant unobservable inputs (Level 3) | Time deposits | ||
Assets | ||
Time deposits | $ 0 | $ 0 |
Financial Instruments and Fai48
Financial Instruments and Fair Value Measures - Transfers of Assets or Liabilities Between The Fair Value Measurement Levels (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
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 | |
Reconciliation of the fair value measurements that use significant unobservable inputs (Level 3) | ||
Additions (see Note 4) | 0 | $ 3,985,000,000 |
Stemcentrx and BI | ||
Reconciliation of the fair value measurements that use significant unobservable inputs (Level 3) | ||
Beginning balance | 4,213,000,000 | 0 |
Change in fair value recognized in net earnings | 547,000,000 | 143,000,000 |
Milestone payments | (305,000,000) | 0 |
Ending balance | $ 4,455,000,000 | $ 4,128,000,000 |
Financial Instruments and Fai49
Financial Instruments and Fair Value Measures - Basis Used To Measure The Approximate Fair Values Of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Time deposits | $ 0 | $ 0 |
Total assets | 0 | 0 |
Liabilities | ||
Short-term borrowings | 0 | 0 |
Current portion of long-term debt and lease obligations | 3,004 | 0 |
Long-term debt and lease obligations, excluding fair value hedges | 33,575 | 34,589 |
Total liabilities | 36,579 | 34,589 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Time deposits | 2 | 5 |
Total assets | 2 | 5 |
Liabilities | ||
Short-term borrowings | 800 | 377 |
Current portion of long-term debt and lease obligations | 23 | 25 |
Long-term debt and lease obligations, excluding fair value hedges | 2,072 | 2,075 |
Total liabilities | 2,895 | 2,477 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Time deposits | 45 | 37 |
Total assets | 45 | 37 |
Liabilities | ||
Short-term borrowings | 0 | 0 |
Current portion of long-term debt and lease obligations | 0 | 0 |
Long-term debt and lease obligations, excluding fair value hedges | 0 | 0 |
Total liabilities | 0 | 0 |
Book Value | ||
Assets | ||
Time deposits | 47 | 42 |
Total assets | 47 | 42 |
Liabilities | ||
Short-term borrowings | 800 | 377 |
Current portion of long-term debt and lease obligations | 3,021 | 25 |
Long-term debt and lease obligations, excluding fair value hedges | 34,269 | 36,778 |
Total liabilities | 38,090 | 37,180 |
Approximate fair value | ||
Assets | ||
Time deposits | 47 | 42 |
Total assets | 47 | 42 |
Liabilities | ||
Short-term borrowings | 800 | 377 |
Current portion of long-term debt and lease obligations | 3,027 | 25 |
Long-term debt and lease obligations, excluding fair value hedges | 35,647 | 36,664 |
Total liabilities | $ 39,474 | $ 37,066 |
Financial Instruments and Fai50
Financial Instruments and Fair Value Measures - Available-for-sale Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Available-for-sale Securities | |||
Maximum maturity period of long-term debt securities (in years) | 5 years | ||
Amortized Cost | $ 2,491,000,000 | $ 2,491,000,000 | $ 1,997,000,000 |
Gross unrealized, Gains | 46,000,000 | 46,000,000 | 62,000,000 |
Gross unrealized, Losses | (5,000,000) | (5,000,000) | (9,000,000) |
Fair Value | 2,532,000,000 | 2,532,000,000 | 2,050,000,000 |
Other-than-temporary impairment losses recognized | 0 | ||
Net realized gains on available-for-sale securities | 39,000,000 | 49,000,000 | |
Short-term investments | |||
Available-for-sale Securities | |||
Debt securities | 549,000,000 | 549,000,000 | 309,000,000 |
Asset backed securities | |||
Available-for-sale Securities | |||
Amortized Cost | 904,000,000 | 904,000,000 | 891,000,000 |
Gross unrealized, Gains | 1,000,000 | 1,000,000 | 1,000,000 |
Gross unrealized, Losses | (2,000,000) | (2,000,000) | (4,000,000) |
Fair Value | 903,000,000 | 903,000,000 | 888,000,000 |
Corporate debt securities | |||
Available-for-sale Securities | |||
Amortized Cost | 1,424,000,000 | 1,424,000,000 | 961,000,000 |
Gross unrealized, Gains | 4,000,000 | 4,000,000 | 1,000,000 |
Gross unrealized, Losses | (1,000,000) | (1,000,000) | (2,000,000) |
Fair Value | 1,427,000,000 | 1,427,000,000 | 960,000,000 |
Other debt securities | |||
Available-for-sale Securities | |||
Amortized Cost | 145,000,000 | 145,000,000 | 127,000,000 |
Gross unrealized, Gains | 0 | 0 | 0 |
Gross unrealized, Losses | 0 | 0 | (1,000,000) |
Fair Value | 145,000,000 | 145,000,000 | 126,000,000 |
Equity securities | |||
Available-for-sale Securities | |||
Amortized Cost | 18,000,000 | 18,000,000 | 18,000,000 |
Gross unrealized, Gains | 41,000,000 | 41,000,000 | 60,000,000 |
Gross unrealized, Losses | (2,000,000) | (2,000,000) | (2,000,000) |
Fair Value | $ 57,000,000 | $ 57,000,000 | $ 76,000,000 |
Financial Instruments and Fai51
Financial Instruments and Fair Value Measures - Concentrations of Risk (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)VEF / $ | Sep. 30, 2017USD ($) | Sep. 30, 2016 | Dec. 31, 2016USD ($) | |
Concentration of Risk | ||||
Exchange rate | VEF / $ | 10 | |||
Net governmental receivables outstanding | $ 4,891 | $ 4,758 | ||
DICOM | ||||
Concentration of Risk | ||||
Exchange rate | VEF / $ | 270 | |||
Asset devaluation loss | $ 298 | |||
Accounts receivable, net | Geographic Risk | ||||
Concentration of Risk | ||||
Concentrations risk (as a percent) | 56.00% | 51.00% | ||
Total revenues | HUMIRA | ||||
Concentration of Risk | ||||
Concentrations risk (as a percent) | 66.00% | 63.00% | ||
Greece, Portugal, Italy, and Spain | Geographic Risk | ||||
Concentration of Risk | ||||
Net governmental receivables outstanding | $ 246 | $ 244 | ||
Saudi Arabia | Geographic Risk | ||||
Concentration of Risk | ||||
Net governmental receivables outstanding | 141 | 122 | ||
Russia | Geographic Risk | ||||
Concentration of Risk | ||||
Net governmental receivables outstanding | $ 142 | $ 110 |
Financial Instruments and Fai52
Financial Instruments and Fair Value Measures - Debt and Credit Facilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Debt Instrument | |||
Short-term borrowings | $ 800 | $ 377 | |
Commercial paper | |||
Debt Instrument | |||
Short-term borrowings | $ 800 | $ 377 | |
Weighted-average interest rate (as a percent) | 1.20% | 0.60% |
Post-Employment Benefits (Detai
Post-Employment Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined benefit plans | ||||
Defined benefit and other post-employment plans | ||||
Employer contributions | $ 150 | $ 150 | ||
AbbVie sponsored plans | Defined benefit plans | ||||
Defined benefit and other post-employment plans | ||||
Service cost | $ 59 | $ 52 | 176 | 158 |
Interest cost | 52 | 50 | 153 | 151 |
Expected return on plan assets | (96) | (88) | (286) | (266) |
Amortization of actuarial losses and prior service costs | 27 | 22 | 80 | 64 |
Net periodic benefit cost | 42 | 36 | 123 | 107 |
AbbVie sponsored plans | Other post-employment plans | ||||
Defined benefit and other post-employment plans | ||||
Service cost | 6 | 6 | 19 | 19 |
Interest cost | 6 | 6 | 18 | 18 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of actuarial losses and prior service costs | 1 | 0 | 1 | 0 |
Net periodic benefit cost | $ 13 | $ 12 | $ 38 | $ 37 |
Equity - Stock based compensati
Equity - Stock based compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax compensation expense | $ 71 | $ 47 | $ 288 | $ 321 |
Tax benefit | 20 | 13 | 85 | 83 |
After-tax compensation expense | 51 | 34 | 203 | 238 |
Cost of products sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax compensation expense | 7 | 6 | 20 | 19 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax compensation expense | 30 | 6 | 127 | 161 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax compensation expense | $ 34 | $ 35 | $ 141 | $ 141 |
Equity - Stock Options (Details
Equity - Stock Options (Details) - Stock Options $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (in shares) | shares | 1.2 |
Weighted-average grant-date fair value of the stock options granted (in dollars per share) | $ / shares | $ 9.80 |
Unrecognized compensation cost | $ | $ 20 |
Period for recognition of unrecognized compensation cost | 2 years |
Equity - RSAs, RSUs and Perform
Equity - RSAs, RSUs and Performance Shares (Details) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
RSUs and Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | shares | 6.1 |
Fair market value of awards vested (in dollars per share) | $ / shares | $ 61.68 |
RSAs, RSUs, and Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ | $ 292 |
Period for recognition of unrecognized compensation cost | 2 years |
Equity - Cash Dividends (Detail
Equity - Cash Dividends (Details) - $ / shares | Oct. 27, 2017 | Sep. 08, 2017 | Jun. 22, 2017 | Feb. 16, 2017 | Oct. 28, 2016 | Sep. 09, 2016 | Jun. 16, 2016 | Feb. 18, 2016 |
Dividends Payable [Line Items] | ||||||||
Dividends paid (in dollars per share) | $ 0.64 | $ 0.64 | $ 0.64 | $ 0.64 | $ 0.57 | $ 0.57 | $ 0.57 | |
Subsequent Event | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividends paid (in dollars per share) | $ 0.71 |
Equity - Share Repurchase Progr
Equity - Share Repurchase Program (Details) - USD ($) shares in Millions | 9 Months Ended | |
Sep. 30, 2017 | Feb. 16, 2017 | |
Stockholders' Equity Note [Abstract] | ||
Amount authorized under stock repurchase program | $ 5,000,000,000 | |
Shares repurchased (in shares) | 7.8 | |
Payment for shares repurchased on the open market | $ 500,000,000 | |
Cash-settled open market purchases | 285,000,000 | |
Remaining authorized repurchase amount | $ 4,500,000,000 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | $ 4,636 | |||
Other comprehensive income (loss) | $ (65) | $ 50 | (27) | $ 221 |
AOCI, ending balance | 6,687 | 6,687 | ||
AOCI Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | (2,586) | (2,561) | ||
Other comprehensive income (loss) before reclassifications | 60 | 207 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | (87) | 14 | ||
Other comprehensive income (loss) | (27) | 221 | ||
AOCI, ending balance | (2,613) | (2,340) | (2,613) | (2,340) |
Foreign currency translation adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | (1,435) | (1,270) | ||
Other comprehensive income (loss) before reclassifications | 602 | 164 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Other comprehensive income (loss) | 602 | 164 | ||
AOCI, ending balance | (833) | (1,106) | (833) | (1,106) |
Net investment hedging activities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | 140 | |||
Other comprehensive income (loss) before reclassifications | (307) | |||
Other comprehensive income (loss) | (307) | |||
AOCI, ending balance | (167) | (167) | ||
Pension and post- employment benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | (1,513) | (1,378) | ||
Other comprehensive income (loss) before reclassifications | (37) | 7 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | 58 | 41 | ||
Other comprehensive income (loss) | 21 | 48 | ||
AOCI, ending balance | (1,492) | (1,330) | (1,492) | (1,330) |
Marketable security activities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | 46 | 47 | ||
Other comprehensive income (loss) before reclassifications | 31 | 23 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | (49) | (4) | ||
Other comprehensive income (loss) | (18) | 19 | ||
AOCI, ending balance | 28 | 66 | 28 | 66 |
Cash flow hedging activities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
AOCI, beginning balance | 176 | 40 | ||
Other comprehensive income (loss) before reclassifications | (229) | 13 | ||
Net losses (gains) reclassified from accumulated other comprehensive loss | (96) | (23) | ||
Other comprehensive income (loss) | (325) | (10) | ||
AOCI, ending balance | $ (149) | $ 30 | $ (149) | $ 30 |
Equity - Amounts Reclassified O
Equity - Amounts Reclassified Out Of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension and post- employment benefits | ||||
Significant amounts reclassified out of each component of AOCI | ||||
Reclassifications from accumulated other comprehensive income, before tax | $ 28 | $ 22 | $ 81 | $ 64 |
Tax (benefit) expense | (8) | (8) | (23) | (23) |
Reclassifications from accumulated other comprehensive income, after tax | 20 | 14 | 58 | 41 |
Cash flow hedging activities | ||||
Significant amounts reclassified out of each component of AOCI | ||||
Reclassifications from accumulated other comprehensive income, before tax | (38) | (2) | (101) | (21) |
Tax (benefit) expense | 0 | (2) | 5 | (2) |
Reclassifications from accumulated other comprehensive income, after tax | $ (38) | $ (4) | $ (96) | $ (23) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 22.00% | 21.00% | 20.00% | 22.00% |
Potential change in unrecognized tax benefits | $ 246 | $ 246 |
Legal Proceedings and Conting62
Legal Proceedings and Contingencies (Details) | 1 Months Ended | 9 Months Ended | |||||||||||
Oct. 31, 2017USD ($) | Jul. 31, 2017USD ($) | Jun. 30, 2016investment_fund | Nov. 30, 2014individual | Sep. 30, 2014company | Aug. 31, 2013provider | Sep. 30, 2017USD ($)claim | Sep. 30, 2017USD ($)companyclaim | Sep. 30, 2017USD ($)direct_purchaserclaim | Sep. 30, 2017USD ($)claimlawsuit | Sep. 30, 2017USD ($)claimclass_action | Sep. 30, 2017USD ($)claimend_payor_purchaser | Dec. 31, 2016USD ($) | |
Legal Proceedings and Contingencies | |||||||||||||
Recorded accrual balance for litigation | $ 215,000,000 | $ 215,000,000 | $ 215,000,000 | $ 215,000,000 | $ 215,000,000 | $ 215,000,000 | $ 225,000,000 | ||||||
Number of individual putative class action lawsuit | 5 | 5 | |||||||||||
Depakote | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Number of claims pending | claim | 625 | 625 | 625 | 625 | 625 | 625 | |||||||
Percentage of pending claims in US District Courts | 90.00% | ||||||||||||
AndroGel Antitrust Litigation | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Number of generic companies with whom certain litigation related agreements were entered into | company | 3 | ||||||||||||
Number of individual plaintiff lawsuits | lawsuit | 4 | ||||||||||||
Number of purported class actions | class_action | 3 | ||||||||||||
AndroGel Antitrust Litigation | Allegation of proposed generic products infringing AbbVie's patents and seeking declaratory and injunctive relief | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Number of generic companies with whom certain litigation related agreements were entered into | company | 2 | ||||||||||||
Niaspan | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Number of individual plaintiff lawsuits | lawsuit | 4 | ||||||||||||
Number of purported class actions | class_action | 2 | ||||||||||||
Number of healthcare benefit providers who filed lawsuits | 3 | 10 | |||||||||||
Sidney Hillman Health Center of Rochester, et al. v. AbbVie Inc., et al. | Depakote | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Number of healthcare benefit providers who filed lawsuits | provider | 3 | ||||||||||||
Testosterone Replacement Therapy Products Liability Litigation | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Numbers of claims are consolidated for pre-trial purposes | claim | 4,300 | 4,300 | 4,300 | 4,300 | 4,300 | 4,300 | |||||||
Number of claims pending | claim | 210 | 210 | 210 | 210 | 210 | 210 | |||||||
Testosterone Replacement Therapy Products Liability Litigation | Punitive damages | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Damages awarded against company | $ 150,000,000 | ||||||||||||
Testosterone Replacement Therapy Products Liability Litigation | Punitive damages | Subsequent Event | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Damages awarded against company | $ 140,000,000 | ||||||||||||
Testosterone Replacement Therapy Products Liability Litigation | Compensatory damages | Subsequent Event | |||||||||||||
Legal Proceedings and Contingencies | |||||||||||||
Damages awarded against company | $ 140,000 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Revenue from External Customer [Line Items] | ||||
Total net revenues | $ 6,995 | $ 6,432 | $ 20,477 | $ 18,842 |
HUMIRA | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 4,701 | 4,060 | 13,535 | 11,786 |
IMBRUVICA | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 688 | 501 | 1,865 | 1,321 |
HCV | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 276 | 378 | 764 | 1,211 |
Lupron | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 201 | 193 | 605 | 602 |
Creon | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 215 | 187 | 596 | 517 |
Synagis | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 116 | 96 | 456 | 460 |
Synthroid | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 191 | 188 | 576 | 558 |
AndroGel | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 147 | 174 | 437 | 501 |
Kaletra | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 85 | 137 | 310 | 416 |
Sevoflurane | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 100 | 102 | 311 | 327 |
Duodopa | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | 94 | 74 | 255 | 215 |
All other | ||||
Revenue from External Customer [Line Items] | ||||
Total net revenues | $ 181 | $ 342 | $ 767 | $ 928 |