What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-05-06 · 102 added, 67 removed, 224 unchanged (43% of the section changed)

1 unchanged sentence

The following is a discussion and analysis of the financial condition of AbbVie Inc.

(AbbVie or the company) as of March 31, 2022 and December 31, 2021 and the results of operations for the three months ended March 31, 2022 and 2021.

(AbbVie or the company) as of June 30, 2022 and December 31, 2021 and the results of operations for the three and six months ended June 30, 2022 and 2021.

This commentary should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying notes appearing in Item 1, “Financial Statements and Supplementary Data.”

20 unchanged sentences

Financial Results

The company's financial performance for the three months ended March 31, 2022 included delivering worldwide net revenues of $13.5 billion, operating earnings of $4.7 billion, diluted earnings per share of $2.51 and cash flows from operations of $4.9 billion.

The company's financial performance for the six months ended June 30, 2022 included delivering worldwide net revenues of $28.1 billion, operating earnings of $8.0 billion, diluted earnings per share of $3.03 and cash flows from operations of $9.9 billion.

Worldwide net revenues grew by 4% on a reported basis and 6% on a constant currency basis, reflecting growth across its immunology, neuroscience and aesthetics portfolios.

Diluted earnings per share was $2.51 for the three months ended March 31, 2022 and included the following after-tax costs:

Diluted earnings per share was $3.03 for the six months ended June 30, 2022 and included the following after-tax costs:

(i) $3.1 billion related to the amortization of intangible assets;

(ii) $148 million for charges related to litigation matters;

(iii) $145 million for acquired IPR&D and milestones;

(ii) $1.9 billion for charges related to litigation matters;

(iii) $875 million for the change in fair value of contingent consideration liabilities;

and (iv) $219 million of acquisition and integration expenses.

These costs were partially offset by an after-tax benefit of $746 million related to the change in fair value of contingent consideration liabilities.

These costs were partially offset by an after-tax gain of $126 million related to the divestiture of Pylera.

Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.

19 unchanged sentences

AbbVie expects this matter could continue to negatively impact its results of operations throughout the duration of the pandemic.

The extent to which COVID-19 may impact AbbVie's financial condition and results of operations remains uncertain and is dependent on numerous evolving factors, including the measures being taken by authorities to mitigate against the spread of COVID-19, the emergence of new variants and the availability and successful administration of effective vaccines.

Research and Development

7 unchanged sentences

• In January 2022, A bbVie announced that the U.S.

Food and Drug Administration (FDA) approved Skyrizi for the treatment of adults with active psoriatic arthritis (PsA).

• In February 2022, AbbVie announced that the FDA has extended the Prescription Drug User Fee Act action date by three months for Skyrizi for the treatment of moderate to severe Crohn’s disease in patients 16 years.

• In January 2022, Abb Vie announced its submission of a supplemental New Drug Application (sNDA) to the FDA and a marketing authorization application (MAA) to the European Medicines Agency (EMA) for Rinvoq for the treatment of adults with active nr-axSpA with objective signs of inflammation who have responded inadequately to nonsteroidal anti-inflammatory drugs.

Food and Drug Administration (FDA) approved Skyrizi for the treatment of adults with active psoriatic arthritis.

• In June 2022, AbbVie announced that the FDA approved Skyrizi for the treatment of adults with moderately to severely active Crohn’s disease.

• In January 2022, AbbVie announced its submission of a supplemental New Drug Application (sNDA) to the FDA for Rinvoq for the treatment of adults with active non-radiographic axial spondyloarthritis (nr-axSpA) with objective signs of inflammation who have responded inadequately to nonsteroidal anti-inflammatory drugs (NSAIDs).

2022 Form 10-Q |

• In January 2022, Ab bVie announced that the FDA approved Rinvoq for the treatment of moderate to severe atopic dermatitis (AD) in adults and children 12 years of age and older whose disease did not respond to previous treatment and is not well controlled with other pills or injections, including biologic medicines, or when use of other pills or injections is not recommended.

• In February 2022, AbbVie was notified that the European Commission (EC) is requesting the EMA to assess safety concerns associated with JAK inhibitor products authorized in inflammatory diseases and to evaluate the impact of these events on their benefit-risk balance.

• In January 2022, Ab bVie announced that the FDA approved Rinvoq for the treatment of moderate to severe atopic dermatitis in adults and children 12 years of age and older whose disease did not respond to previous treatment and is not well controlled with other pills or injections, including biologic medicines, or when use of other pills or injections is not recommended.

• In February 2022, AbbVie was notified that the European Commission (EC) is requesting the European Medicines Agency (EMA) to assess safety concerns associated with JAK inhibitor products authorized in inflammatory diseases and to evaluate the impact of these events on their benefit-risk balance.

The assessment covers all JAK inhibitors approved for use in inflammatory diseases.

The request is for an opinion from the EMA by September 30, 2022.

• In February 2022, AbbVie announced top-line results from its second Phase 3 induction study, U-Excel, for Rinvoq in patients with moderate to severe Crohn’s disease who had an inadequate response or were intolerant to conventional or biologic therapy met the primary and most key secondary endpoints.

• In March 2022, AbbVie announced that the FDA approved Rinvoq for the treatment of adults with moderately to severely active ulcerative colitis who have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers.

• In March 2022, AbbVie announced that the FDA approved Rinvoq for the treatment of adults with moderately to severely active ulcerative colitis (UC) who have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers.

• In April 2022, AbbVie announced that the FDA approved Rinvoq for the treatment of adults with active ankylosing spondylitis who have had an inadequate response or intolerance to one or more TNF blockers.

• In May 2022, AbbVie announced positive top-line results from U-ENDURE, its Phase 3 maintenance study for Rinvoq in adult patients with moderate to severe Crohn's disease who had an inadequate response or were intolerant to a conventional or biologic therapy.

The results showed that more patients treated with Rinvoq achieved the co-primary and secondary endpoints at one year compared to placebo.

• In July 2022, AbbVie announced that the EC approved Rinvoq for the treatment of adults with moderately to severely active UC who have had an inadequate response, lost response or were intolerant to either conventional therapy or a biologic agent.

• In July 2022, AbbVie announced its submission of an sNDA to the FDA and a marketing authorization application (MAA) to the EMA for Rinvoq for the treatment of adult patients with moderately to severely active Crohn’s disease.

• In July 2022, AbbVie announced that the EC approved Rinvoq for the treatment of adult patients with active nr-axSpA.

• In January 2022, AbbVie announced that the FDA granted Breakthrough Therapy Designation to investigational telisotuzumab vedotin (Teliso-V) for the treatment of patients with advanced/metastatic epidermal growth factor receptor wild type, nonsquamous non-small cell lung cancer with high levels of c-Met overexpression whose disease has progressed on or after platinum-based therapy.

• In May 2022, AbbVie initiated a Phase 3 clinical trial to evaluate Teliso-V versus docetaxel for the treatment of patients with previously treated c-Met overexpressing, epidermal growth factor receptor wild type, advanced/metastatic non-squamous non-small cell lung cancer.

• In February 2022, AbbVie submitted an sNDA to the FDA for Imbruvica for the treatment of pediatric and adolescent patients one year and older with chronic graft versus host disease after failure of one or more lines of systemic therapy.

2 unchanged sentences

and Japan, with AbbVie responsible for further global commercialization.

• In April 2022, AbbVie and Genmab announced positive topline results from the first cohort of the EPCORE NHL-1 phase 1/2 clinical trial evaluating epcoritamab (DuoBody-CD3xCD20) in patients with relapsed/refractory large B-cell lymphoma (LBCL) who received at least two prior lines of systemic therapy.

Based on the topline results, the companies will engage global regulatory authorities.

2022 Form 10-Q |

• In June 2022, AbbVie announced primary results from the large B-cell lymphoma expansion cohort in the EPCORE NHL-1 phase 2 clinical trial evaluating epcoritamab, an investigational subcutaneous bispecific antibody.

In this study, epcoritamab demonstrated efficacy with durable responses in patients who had previously received at least two prior lines of anti-lymphoma therapy including chimeric antigen receptor T-cell therapy.

Juvederm Collection

1 unchanged sentence

• In March 2022, AbbVie initiated three Phase 3 clinical trials to evaluate the efficacy and safety of BoNTE (AGN-151586) for the treatment of glabellar lines.

2022 Form 10-Q |

• In February 2022, AbbVie submitted an sNDA to the FDA for Vraylar for the adjunctive treatment of major depressive disorder in patients who are receiving ongoing antidepressant therapy.

• In March 2022, AbbVie announced results from the Phase 3 PROGRESS trial for Qulipta in the preventive treatment of chronic migraine in adults met the primary endpoint and resulted in significant improvements in all secondary endpoints after adjustment for multiple comparisons.

• In June 2022, AbbVie submitted an sNDA to the FDA for Qulipta for the preventative treatment of chronic migraine in adults.

• In July 2022, AbbVie submitted an MAA to the EMA for Qulipta for the prophylactic treatment of migraine in adult patients who have at least four migraine days per month.

• In May 2022, AbbVie submitted a New Drug Application to the FDA for ABBV-951 (foscarbidopa/foslevodopa) for the treatment of motor fluctuations in patients with advanced Parkinson's disease.

• In April 2022, AbbVie announced that the Phase 3 VIRGO trial evaluating the safety and efficacy of investigational twice-daily administration of Vuity 1.25% in adults with presbyopia met its primary efficacy endpoint.

• In June 2022, AbbVie submitted an sNDA to the FDA for twice-daily administration of Vuity 1.25% in adults with presbyopia.

For a more comprehensive discussion of AbbVie’s products and pipeline, see the company’s Annual Report on Form 10-K for the year ended December 31, 2021.

5 unchanged sentences

Three months ended

March 31, Percent change

June 30, Percent change Six months ended

June 30, Percent change

currency rates At constant

currency rates At actual

currency rates At constant

currency rates

(dollars in millions)

2022 2021 2022 2021

United States

6 unchanged sentences

Three months ended

March 31, Percent change

June 30, Percent change Six months ended

June 30, Percent change

currency rates At constant

currency rates At actual

currency rates At constant

currency rates

(dollars in millions)

2022 2021 2022 2021

Humira United States $ 4,664 $ 4,257 9.6 % 9.6 % $ 8,657 $ 8,164 6.0 % 6.0 %

31 unchanged sentences

Ubrelvy United States $ 185 $ 126 47.6 % 47.6 % $ 323 $ 207 56.4 % 56.4 %

Qulipta United States $ 11 $ — n/m n/m

Qulipta United States $ 33 $ — n/m n/m $ 44 $ — n/m n/m

Other Neuroscience United States $ 145 $ 167 (13.6) % (13.6) % $ 318 $ 323 (1.7) % (1.7) %

3 unchanged sentences

Three months ended

March 31, Percent change

June 30, Percent change Six months ended

June 30, Percent change

currency rates At constant

currency rates At actual

currency rates At constant

currency rates

(dollars in millions)

2022 2021 2022 2021

Lumigan/Ganfort United States $ 60 $ 72 (17.4) % (17.4) % $ 127 $ 138 (8.3) % (8.3) %

22 unchanged sentences

The following discussion and analysis of AbbVie’s net revenues by product is presented on a constant currency basis.

Global Humira sales decreased by 2% for the three months ended March 31, 2022 primarily driven by direct biosimilar competition in certain international markets, partially offset by market growth across therapeutic categories.

In the United States, Humira sales increased by 2% for the three months ended March 31, 2022 primarily driven by market growth across all indications.

This increase was partially offset by slightly lower market share following corresponding market share gains of Skyrizi and Rinvoq.

Internationally, Humira revenues decreased by 18% for the three months ended March 31, 2022 primarily driven by direct biosimilar competition in certain international markets.

Net revenues for Skyrizi increased by 66% for the three months ended March 31, 2022 primarily driven by continued strong volume and market share uptake since launch as a treatment for plaque psoriasis as well as market growth.

Net revenues for Rinvoq increased by 57% for the three months ended March 31, 2022 primarily driven by continued strong volume and market share uptake since launch for the treatment of moderate to severe rheumatoid arthritis as well as market growth.

Net revenues for the three months ended March 31, 2022 were also favorably impacted by recent regulatory approvals and expansion of Rinvoq for the treatment of psoriatic arthritis, atopic dermatitis and ankylosing spondylitis in certain international markets.

Global Humira sales increased by 7% for the three months and 3% for the six months ended June 30, 2022 primarily driven by market growth across therapeutic categories, partially offset by direct biosimilar competition in certain international markets.

In the United States, Humira sales increased by 10% for the three months and 6% for the six months ended June 30, 2022 primarily driven by market growth across all indications and favorable pricing.

This increase was partially offset by lower market share following corresponding market share gains of Skyrizi and Rinvoq.

Internationally, Humira revenues decreased by 7% for the three months and 13% for the six months ended June 30, 2022 primarily driven by direct biosimilar competition in certain international markets.

Net revenues for Skyrizi increased by 88% for the three months and 78% for the six months ended June 30, 2022 primarily driven by continued strong volume and market share uptake since launch as a treatment for plaque psoriasis as well as market growth.

Net revenues for the three and six months ended June 30, 2022 were also favorably impacted by recent regulatory approvals and expansion of Skyrizi for the treatment of psoriatic arthritis.

Net revenues for Rinvoq increased by 61% for the three months and 59% for the six months ended June 30, 2022 primarily driven by continued strong volume and market share uptake since launch for the treatment of moderate to severe rheumatoid arthritis as well as market growth.

Net revenues for the three and six months ended June 30, 2022 were also favorably impacted by recent regulatory approvals and expansion of Rinvoq for the treatment of psoriatic arthritis, atopic dermatitis, ankylosing spondylitis and ulcerative colitis.

Net revenues for Imbruvica represent product revenues in the United States and collaboration revenues outside of the United States related to AbbVie’s 50% share of Imbruvica profit.

AbbVie's global Imbruvica revenues decreased by 7% for the three months ended March 31, 2022 as a result of lower new patient starts due to the COVID-19 pandemic and share loss in the United States, partially offset by increased collaboration revenues.

Net revenues for Venclexta increased by 21% for the three months ended March 31, 2022 primarily due to continued expansion of Venclexta for the treatment of patients with first-line chronic lymphocytic leukemia (CLL), relapsed/refractory CLL and first-line acute myeloid leukemia.

Net revenues for Botox Cosmetic used in facial aesthetics increased by 37% for the three months ended March 31, 2022 due to increased consumer demand and penetration rates driven by targeted brand investment.

AbbVie's global Imbruvica revenues decreased by 17% for the three months and 13% for the six months ended June 30, 2022 as a result of decreased market demand and lower new patient starts in the United States.

The decrease in net revenues for the six months ended June 30, 2022 was also partially offset by increased collaboration revenues.

Net revenues for Venclexta increased by 21% for the three and six months ended June 30, 2022 primarily due to continued expansion of Venclexta for the treatment of patients with chronic lymphocytic leukemia (CLL), relapsed/refractory CLL and acute myeloid leukemia.

2022 Form 10-Q |

Net revenues for Juvederm Collection (including Juvederm Ultra XC, Juvederm Voluma XC and other Juvederm products) used in facial aesthetics increased by 31% for the three months ended March 31, 2022 due to increased consumer demand and penetration rates driven by targeted brand investment.

Net revenues for Botox Therapeutic used primarily in neuroscience and urology therapeutic areas increased by 17% for the three months ended March 31, 2022 due to market growth, higher market share and strong market recovery from the COVID-19 pandemic.

Net revenues for Vraylar for the treatment of schizophrenia, bipolar I disorder and bipolar depression increased by 23% for the three months ended March 31, 2022 due to higher market share and market growth.

Net revenues for Ubrelvy for the acute treatment of migraine with or without aura in adults increased by 70% for the three months ended March 31, 2022 primarily due to increased market share uptake since launch.

Net revenues for Mavyret decreased by 5% for the three months ended March 31, 2022 driven by the continued disruption of global HCV markets due to the COVID-19 pandemic.

Net revenues for Botox Cosmetic used in facial aesthetics increased by 21% for the three months and 28% for the six months ended June 30, 2022 due to increased consumer demand driven by targeted brand investment.

Net revenues for Juvederm Collection used in facial aesthetics decreased by 16% for the three months ended June 30, 2022 due to COVID-19 restrictions in China and suspension of aesthetic operations in Russia.

Net revenues for Juvederm Collection increased 4% for the six months ended June 30, 2022 due to market growth partially offset by COVID-19 restrictions in China and suspension of aesthetic operations in Russia.

In the United States, net revenues for the three and six months ended June 30, 2022 were unfavorably impacted by higher revenues in the prior year due to a one-time promotion in the three months ended June 30, 2021.

Net revenues for Botox Therapeutic used primarily in neuroscience and urology therapeutic areas increased by 14% for the three months and 15% for the six months ended June 30, 2022 due to market growth.

Net revenues for Vraylar for the treatment of schizophrenia, bipolar I disorder and bipolar depression increased by 14% for the three months and 18% for the six months ended June 30, 2022 due to higher market share and market growth.

Net revenues for Ubrelvy for the acute treatment of migraine with or without aura in adults increased by 48% for the three months and 56% for the six months ended June 30, 2022 primarily due to increased market share uptake since launch.

Net revenues for Mavyret decreased by 5% for the three and six months ended June 30, 2022 due to the continued disruption of global HCV markets due to the COVID-19 pandemic.

Three months ended

(dollars in millions) 2022 2021 % change

June 30, Six months ended

(dollars in millions) 2022 2021 % change 2022 2021 % change

Gross margin $ 10,413 $ 9,436 10 % $ 19,899 $ 18,233 9 %

as a % of net revenues 71 % 68 % 71 % 68 %

Gross margin as a percentage of net revenues increased for the three months ended March 31, 2022 compared to the prior year.

Gross margin percentage for the three months ended March 31, 2022 was favorably impacted by changes in product mix and lower amortization of intangible assets associated with the Allergan acquisition.

Gross margin as a percentage of net revenues increased for the three and six months ended June 30, 2022 compared to the prior year.

Gross margin percentage for the three and six months ended June 30, 2022 was favorably impacted by changes in product mix and lower amortization of intangible assets associated with the Allergan acquisition.

Selling, General and Administrative

Three months ended

(dollars in millions) 2022 2021 % change

June 30, Six months ended

(dollars in millions) 2022 2021 % change 2022 2021 % change

Selling, general and administrative $ 5,412 $ 3,164 71 % $ 8,539 $ 6,006 42 %

as a % of net revenues 37 % 23 % 30 % 22 %

SG&A expenses as a percentage of net revenues increased for the three months ended March 31, 2022 compared to the prior year.

SG&A expense percentage for the three months ended March 31, 2022 was unfavorably impacted by litigation reserve charges of $184 million as well as increased brand investment and product launch expenses, partially offset by leverage from revenue growth and increased synergies realized.

Selling, general and administrative (SG&A) expenses as a percentage of net revenues increased for the three and six months ended June 30, 2022 compared to the prior year.

SG&A expense percentage for the three and six months ended June 30, 2022 was unfavorably impacted by litigation reserve charges of $2.2 billion for the three months and $2.4 billion for the six months ended June 30, 2022.

Research and Development and Acquired IPR&D and Milestones

Three months ended

(dollars in millions) 2022 2021 % change

June 30, Six months ended

(dollars in millions) 2022 2021 % change 2022 2021 % change

Research and development $ 1,609 $ 1,767 (9) % $ 3,106 $ 3,434 (10) %

1 unchanged sentence

Acquired IPR&D and milestones $ 269 $ 132 >100% $ 414 $ 317 31 %

R&D expenses as a percentage of net revenues decreased for the three months ended March 31, 2022 compared to the prior year.

R&D expense percentage was favorably impacted by the purchase of a priority review voucher from a third party in the first quarter of 2021, increased scale of the combined company and synergies realized as well as lower integration costs related to the acquisition of Allergan.

Acquired IPR&D and milestones expense represents upfront and subsequent development milestone payments incurred prior to regulatory approval to acquire rights to in-process R&D projects through R&D collaborations, licensing arrangements or other asset acquisitions.

Acquired IPR&D and milestones expense in the three months ended March 31, 2022 included a charge of $130 million as a result of acquiring Syndesi Therapeutics SA and its portfolio of novel modulators of the synaptic vesicle protein 2A (SV2A), including its lead molecule SDI-118, which is being evaluated to target nerve terminals to enhance synaptic efficiency.

There were no individually significant transactions during the three months ended March 31, 2021.

Research and development (R&D) expenses as a percentage of net revenues decreased for the three and six months ended June 30, 2022 compared to the prior year.

R&D expense percentage was favorably impacted by the purchase of priority review vouchers from third parties during the three and six months ended June 30, 2021, increased scale of the combined company and synergies realized as well as lower integration costs related to the acquisition of Allergan.

2022 Form 10-Q |

Acquired IPR&D and milestones expense in the six months ended June 30, 2022 included a charge of $130 million as a result of acquiring Syndesi Therapeutics SA and its portfolio of novel modulators of the synaptic vesicle protein 2A, including its lead molecule SDI-118, which is being evaluated to target nerve terminals to enhance synaptic efficiency.

There were no individually significant transactions during the three months ended June 30, 2022 and the three and six months ended June 30, 2021.

Other Operating Income

Other operating income for the three and six months ended June 30, 2022 included $172 million of income related to the sale of worldwide commercial rights of a mature brand Pylera, which is used for the treatment of peptic ulcers with an infection by the bacterium Helicobacter pylori.

See Note 4 to the Condensed Consolidated Financial Statements for additional information.

Other operating income for the three and six months ended June 30, 2021 included $68 million of income related to the sale of a biologics facility.

Other Non-Operating Expenses (Income)

Three months ended

June 30, Six months ended

(in millions) 2022 2021 2022 2021

3 unchanged sentences

Net foreign exchange loss $ 47 $ 14 $ 72 $ 23

Other income, net (776) (395)

Interest expense, net decreased for the three months ended March 31, 2022 compared to the prior year primarily due to lower average debt balance due to deleveraging.

Other income, net included a benefit related to changes in fair value of contingent consideration liabilities of $748 million for the three months ended March 31, 2022 and $343 million for the three months ended March 31, 2021.

Other expense, net 1,533 2,658 757 2,263

Interest expense, net decreased for the three and six months ended June 30, 2022 compared to the prior year primarily due to a lower average debt balance as a result of deleveraging.

Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $1.6 billion for the three months and $861 million for the six months ended June 30, 2022 and $2.7 billion for the three months and $2.3 billion for the six months ended June 30, 2021.

The fair value of contingent consideration liabilities is impacted by the passage of time and multiple other inputs, including the probability of success of achieving regulatory/commercial milestones, discount rates, the estimated amount of future sales of the acquired products and other market-based factors.

For the three months ended March 31, 2022 and 2021, the change in fair value was driven by higher discount rates partially offset by the passage of time.

For the three and six months ended June 30, 2022, the change in fair value represented higher estimated Skyrizi sales driven by stronger market share uptake, partially offset by higher discount rates.

For the three and six months ended June 30, 2021, the change in fair value represented higher estimated Skyrizi sales driven by stronger market share uptake, favorable Skyrizi clinical trial results and lower discount rates.

Income Tax Expense

The effective tax rate was 9% for the three months ended March 31, 2022 compared to 8% for the three months ended March 31, 2021.

The effective tax rate was 22% for the three months and 11% for the six months ended June 30, 2022 compared to 34% for the three months and 14% for the six months ended June 30, 2021.

The effective tax rate in each period differed from the U.S.

statutory tax rate of 21% principally due to the impact of foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions, business development activities and accretion on contingent consideration.

The increase in the effective tax rate for the three months ended March 31, 2022 over the prior year was primarily due to differences in the company’s jurisdictional mix of earnings.

The decrease in the effective tax rate for the three and six months ended June 30, 2022 over the prior year was primarily due to differences in the company’s jurisdictional mix of earnings and accretion on contingent consideration.

2022 Form 10-Q |

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Three months ended

Six months ended

(in millions) 2022 2021

3 unchanged sentences

Financing activities (9,651) (9,058)

Operating cash flows for the three months ended March 31, 2022 were flat compared to the prior year primarily due to improved results of operations resulting from revenue growth, offset by the timing of working capital cash flows.

Investing cash flows for the three months ended March 31, 2022 included payments made for net purchases of investment securities totaling $1.4 billion, acquisitions and investments of $185 million and capital expenditures of $162 million.

Investing cash flows for the three months ended March 31, 2021 included payments made for acquisitions and investments of $198 million, capital expenditures of $188 million and net purchases of investment securities totaling $5 million.

Financing cash flows for the three months ended March 31, 2022 included an early repayment of $2.9 billion aggregate principal amount of the company’s 3.45% senior notes.

Operating cash flows for the six months ended June 30, 2022 increased compared to the prior year primarily due to improved results of operations resulting from revenue growth, partially offset by the timing of working capital cash flows.

Investing cash flows for the six months ended June 30, 2022 included payments made for net purchases of investment securities totaling $1.4 billion, acquisitions and investments of $394 million and capital expenditures of $305 million.

Investing cash flows for the six months ended June 30, 2021 included capital expenditures of $383 million, payments made for acquisitions and investments of $345 million and net sales and maturities of investment securities totaling $9 million.

Financing cash flows for the six months ended June 30, 2022 included repayment of $2.9 billion aggregate principal amount of the company’s 3.45% senior notes.

Additionally, financing cash flows included repayment of a $2.0 billion floating rate term loan due May 2025 and issuance of a new $2.0 billion floating rate term loan as part of the term loan refinancing in February 2022.

Financing cash flows also included cash dividend payments of $2.5 billion for the three months ended March 31, 2022 and $2.3 billion for the three months ended March 31, 2021.

Financing cash flows for the six months ended June 30, 2021 included repayment of $1.8 billion aggregate principal amount of the company’s 2.3% senior notes, €750 million aggregate principal amount of the company’s 0.5% senior euro notes and $750 million aggregate principal amount of floating rate senior notes.

Financing cash flows also included cash dividend payments of $5.0 billion for the six months ended June 30, 2022 and $4.6 billion for the six months ended June 30, 2021.

The increase in cash dividend payments was primarily driven by the increase in the quarterly dividend rate.

2022 Form 10-Q |

On February 17, 2022, the company announced that its board of directors declared a quarterly cash dividend of $1.41 per share for stockholders of record at the close of business on April 15, 2022, payable on May 16, 2022.

On June 23, 2022, the company announced that its board of directors declared a quarterly cash dividend of $1.41 per share for stockholders of record at the close of business on July 15, 2022, payable on August 15, 2022.

The timing, declaration, amount of and payment of any dividends by AbbVie in the future is within the discretion of its board of directors and will depend upon many factors, including AbbVie’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie’s debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by its board of directors.

1 unchanged sentence

The program has no time limit and can be discontinued at any time.

AbbVie repurchased 8 million shares for $1.1 billion during the three months ended March 31, 2022 and 5 million shares for $550 million during the three months ended March 31, 2021.

AbbVie repurchased 8 million shares for $1.1 billion during the six months ended June 30, 2022 and 5 million shares for $550 million during the six months ended June 30, 2021.

AbbVie monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad.

6 unchanged sentences

This credit facility enables the company to borrow funds on an unsecured basis at variable interest rates and contains various covenants.

At March 31, 2022, the company was in compliance with all covenants, and commitment fees under the credit facility were insignificant.

No amounts were outstanding under the company's credit facility as of March 31, 2022 and December 31, 2021.

At June 30, 2022, the company was in compliance with all covenants, and commitment fees under the credit facility were insignificant.

No amounts were outstanding under the company's credit facility as of June 30, 2022 and December 31, 2021.

2022 Form 10-Q |

Access to Capital

9 unchanged sentences

A summary of the company’s significant accounting policies is included in Note 2, “Summary of Significant Accounting Policies” in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2021.

There have been no significant changes in the company’s application of its critical accounting policies during the three months ended March 31, 2022.

2022 Form 10-Q |

There have been no significant changes in the company’s application of its critical accounting policies during the six months ended June 30, 2022.

FORWARD-LOOKING STATEMENTS

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis