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Item 2. Management’s Discussion and Analysis

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

(AbbVie or the company) as of March 31, 2024 and December 31, 2023 and the results of operations for the three months ended March 31, 2024 and 2023.

(AbbVie or the company) as of June 30, 2024 and December 31, 2023 and the results of operations for the three and six months ended June 30, 2024 and 2023.

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.”

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AbbVie uses its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases.

On February 20, 2024, AbbVie announced Robert A.

Michael, AbbVie's current president and chief operating officer, will succeed Richard A.

On July 1, 2024, AbbVie announced Robert A.

Michael, AbbVie's former president and chief operating officer, succeeded Richard A.

Gonzalez as the company's chief executive officer (CEO).

Gonzalez, who has served as CEO since the company's formation in 2013, will retire from the role of CEO and become executive chairman of the board of directors, effective July 1, 2024.

Gonzalez, who has served as CEO since the company's formation in 2013, retired from the role of CEO and became executive chairman of the board of directors, effective July 1, 2024.

Additionally, the board has appointed Mr.

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Financial Results

The company's financial performance for the three months ended March 31, 2024 included delivering worldwide net revenues of $12.3 billion, operating earnings of $2.8 billion, diluted earnings per share of $0.77 and cash flows from operations of $4.0 billion.

The company's financial performance for the six months ended June 30, 2024 included delivering worldwide net revenues of $26.8 billion, operating earnings of $6.8 billion, diluted earnings per share of $1.53 and cash flows from operations of $6.3 billion.

Worldwide net revenues increased 3% on a reported basis and 4% on a constant currency basis.

Diluted earnings per share was $0.77 for the three months ended March 31, 2024 and included the following after-tax costs:

Diluted earnings per share was $1.53 for the six months ended June 30, 2024 and included the following after-tax costs:

(i) $3.3 billion related to the amortization of intangible assets;

(ii) $643 million for the change in fair value of contingent

(ii) $2.1 billion for the change in fair value of contingent consideration

2024 Form 10-Q |

consideration liabilities;

and (iii) $611 million of acquisition and integration expenses.

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Significant Programs and Developments

• In January 2024, AbbVie initiated a Phase 3 study to evaluate Rinvoq in adults and adolescents with non-segmental vitiligo who are eligible for systemic therapy.

• In April 2024, AbbVie announced positive top-line results from its Phase 3 SELECT-GCA trial for Rinvoq in combination with a 26-week steroid taper regimen in patients with giant cell arteritis achieved its primary endpoint.

• In January 2024, AbbVie initiated a Phase 3 clinical trial to evaluate Rinvoq in adults and adolescents with non-segmental vitiligo who are eligible for systemic therapy.

• In April 2024, AbbVie announced positive top-line results from the head-to-head Phase 3b/4 Level-Up trial evaluating Rinvoq compared to dupilumab in adolescent and adult patients with moderate to severe atopic dermatitis.

In the study, Rinvoq demonstrated superiority to dupilumab on the primary endpoint and all ranked secondary endpoints.

• In June 2024, AbbVie announced that the U.S.

Food and Drug Administration (FDA) has approved Rinvoq for the treatment of pediatric patients two years of age and older with active polyarticular juvenile idiopathic arthritis (pJIA) as well as psoriatic arthritis (PsA), provided they have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers.

• In July 2024, AbbVie announced that it has submitted applications for a new indication to the FDA and European Medicines Agency (EMA) for Rinvoq for the treatment of adult patients with GCA.

• In June 2024, AbbVie announced that the FDA has approved Skyrizi for adults with moderately to severely active ulcerative colitis (UC).

• In July 2024, AbbVie announced that the European Commission has approved Skyrizi for the treatment of adult patients with moderately to severely active UC who have had an inadequate response to, lost response to, or were intolerant to conventional therapy or a biologic therapy.

• In January 2024, AbbVie announced Phase 2 results showing adults with moderate to severe hidradenitis suppurativa (HS) who had previously failed anti-TNF therapy who received lutikizumab achieved higher response rates than placebo in the primary endpoint of achieving HS Clinical Response at week 16.

Based on these data, AbbVie will advance its clinical program of lutikizumab in HS to Phase 3.

• In February 2024, AbbVie announced that the U.S.

Food and Drug Administration (FDA) granted priority review of the supplemental Biologics License Application (sBLA) of Epkinly, for the treatment of adult relapsed or refractory (R/R) follicular lymphoma (FL).

• In March 2024, AbbVie initiated a Phase 3 clinical trial to evaluate Epkinly in combination with rituximab and lenalidomide in patients with previously untreated follicular lymphoma.

• In March 2024, AbbVie announced that the FDA granted full approval for Elahere for the treatment of folate receptor alpha (FRα)-positive, platinum-resistant epithelial ovarian, fallopian tube or primary peritoneal adult cancer patients treated with up to three prior therapies.

• In April 2024, AbbVie announced its decision to discontinue the Phase 3 TRANSFORM-2 study evaluating Navitoclax, a BCL-XL/BCL-2 inhibitor, plus ruxolitinib in patients with relapsed/refractory myelofibrosis following evaluation of the totality of data from the Phase 3 TRANSFORM-1 trial and recent feedback from regulators.

• In July 2024, AbbVie initiated a Phase 3 clinical trial to evaluate lutikizumab in adult and adolescent patients with moderate to severe HS.

• In March 2024, AbbVie initiated a Phase 3 clinical trial to evaluate Epkinly in combination with rituximab and lenalidomide in patients with previously untreated follicular lymphoma (FL).

2024 Form 10-Q |

• In June 2024, AbbVie announced that the FDA has approved Epkinly for the treatment of adults with relapsed or refractory (R/R) FL after two or more lines of prior therapy.

This indication is approved under the FDA's Accelerated Approval program based on overall response rate (ORR) and durability of response.

Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

• In June 2024, AbbVie announced that the EMA Committee for Medicinal Products for Human Use has adopted a positive opinion recommending the conditional marketing authorization of Tepkinly as a monotherapy for the treatment of adult patients with R/R FL after two or more prior therapies.

• In June 2024, AbbVie announced positive topline results from the Phase 2 PICCOLO trial evaluating Elahere monotherapy in heavily pre-treated patients with FRα positive, platinum-sensitive ovarian cancer.

The study met its primary endpoint and no new safety concerns were identified.

• In April 2024, AbbVie announced its decision to discontinue the Phase 3 TRANSFORM-2 study evaluating navitoclax, a BCL-XL/BCL-2 inhibitor, plus ruxolitinib in patients with R/R myelofibrosis following evaluation of the totality of data from the Phase 3 TRANSFORM-1 trial and feedback from regulators.

• In June 2024, AbbVie initiated the CERVINO Phase 3 clinical trial to evaluate ABBV-383 monotherapy compared with standard available therapies in adult patients with R/R multiple myeloma who have received at least two lines of prior therapy.

Juvederm Collection

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• In January 2024, AbbVie announced the launch of Produodopa (ABBV-951) in the European Union for the treatment of advanced Parkinson's disease with severe motor fluctuations and hyperkinesia (excessive movement) or dyskinesia (involuntary movement), and when available combinations of Parkinson's medicinal products have not given satisfactory results.

• In June 2024, AbbVie announced it received a Complete Response Letter (CRL) from the FDA for the New Drug Application (NDA) for ABBV-951 for the treatment of motor fluctuations in adults with advanced Parkinson's disease.

In its letter, the FDA cited observations that were identified during inspection of a third-party manufacturer listed in the NDA.

The CRL did not identify any issues related to the safety, efficacy or labeling of ABBV-951, including the device, and does not request that AbbVie conduct additional efficacy or safety trials related to the drug or device-related testing.

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, 2023.

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currency rates At constant

currency rates At actual

currency rates At constant

currency rates

(dollars in millions)

2024 2023 2024 2023

United States

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currency rates At constant

currency rates At actual

currency rates At constant

currency rates

(dollars in millions)

2024 2023 2024 2023

Humira United States $ 2,360 $ 3,452 (31.6) % (31.6) % $ 4,131 $ 6,400 (35.5) % (35.5) %

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United States

$ 64 $ — n/m n/m

$ 128 $ — n/m n/m $ 192 $ — n/m n/m

Epkinly Collaboration revenues

$ 22 $ — n/m n/m

International 5 — n/m n/m

Total $ 27 $ — n/m n/m

$ 29 $ — >100.0 % >100.0 % $ 51 $ — >100.0 % >100.0 %

International 7 — n/m n/m 12 — n/m n/m

Total $ 36 $ — >100.0 % >100.0 % $ 63 $ — >100.0 % >100.0 %

Botox Cosmetic United States $ 450 $ 420 7.1 % 7.1 % $ 839 $ 829 1.2 % 1.2 %

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currency rates At constant

currency rates At actual

currency rates At constant

currency rates

(dollars in millions)

2024 2023 2024 2023

Other Neuroscience United States $ 57 $ 65 (10.1) % (10.1) % $ 118 $ 140 (14.6) % (14.6) %

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

Global Humira sales decreased 35% for the three months ended March 31, 2024.

In the United States, Humira sales decreased by 40% for the three months ended March 31, 2024 primarily driven by direct biosimilar competition following the loss of exclusivity on January 31, 2023.

Internationally, Humira revenues decreased 12% for the three months ended March 31, 2024 primarily driven by the continued impact of direct biosimilar competition.

Global Humira sales decreased 29% for the three months and 32% for the six months ended June 30, 2024.

In the United States, Humira sales decreased by 32% for the three months and 36% for the six months ended June 30, 2024 primarily driven by direct biosimilar competition following the loss of exclusivity on January 31, 2023.

Internationally, Humira revenues decreased 13% for the three months and 12% for the six months ended June 30, 2024 primarily driven by the continued impact of direct biosimilar competition.

AbbVie continues to pursue strategies to maintain broad formulary access of Humira and manage the impact of biosimilar erosion.

Net revenues for Skyrizi increased 48% for the three months ended March 31, 2024 primarily driven by continued strong market share uptake and market growth across all indications, partially offset by the timing of retail inventory destocking.

Net revenues for Rinvoq increased 62% for the three months ended March 31, 2024 primarily driven by continued strong market share uptake as well as market growth across all indications.

Net revenues for Skyrizi increased 46% for the three months and 47% for the six months ended June 30, 2024 primarily driven by continued strong market share uptake as well as market growth across all indications.

Net revenues for Rinvoq increased 59% for the three months and 60% for the six months ended June 30, 2024 primarily driven by continued strong market share uptake as well as market growth across all indications.

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 5% for the three months ended March 31, 2024 primarily driven by decreased demand and lower market share in the United States as well as decreased collaboration revenues, partially offset by the timing of inventory stocking.

Net revenues for Venclexta increased 16% for the three months ended March 31, 2024 driven by continued market share uptake as well as market growth across all indications.

AbbVie's global Imbruvica revenues decreased 8% for the three months and 6% for the six months ended June 30, 2024 primarily driven by decreased demand and lower market share in the United States.

Net revenues for Venclexta increased 16% for the three and six months ended June 30, 2024 primarily driven by continued market share uptake and market growth across all indications.

2024 Form 10-Q |

Net revenues for Elahere were $64 million for the three months ended March 31, 2024 for the period subsequent to the completion of the ImmunoGen acquisition.

Net revenues for Botox Cosmetic decreased 3% for the three months ended March 31, 2024 primarily driven by the unfavorable impact related to timing of customer inventory destocking in the United States.

Net revenues for Juvederm Collection decreased 14% for the three months ended March 31, 2024 primarily driven by the unfavorable impact related to timing of customer inventory destocking in the United States and decreased consumer demand across certain international markets.

Net revenues for Botox Therapeutic increased 5% for the three months ended March 31, 2024 primarily driven by continued market share uptake as well as market growth.

Net revenues for Vraylar increased 24% for the three months ended March 31, 2024 primarily driven by continued market share uptake.

Net revenues for Ubrelvy increased 34% for the three months ended March 31, 2024 primarily driven by continued market share uptake as well as market growth.

Net revenues for Qulipta increased 98% for the three months ended March 31, 2024 primarily driven by continued strong market share uptake.

Net revenues were also favorably impacted by the regulatory approval of Qulipta for the preventive treatment of chronic migraine in adults.

Net revenues for Elahere were $128 million for the three months and $192 million for the six months ended June 30, 2024 for the period subsequent to the completion of the ImmunoGen acquisition.

Net revenues for Botox Cosmetic increased 9% for the three months and 3% for the six months ended June 30, 2024 primarily driven by favorable pricing and increased consumer demand.

Net revenues for the six months ended June 30, 2024 were also partially offset by the unfavorable impact of customer inventory destocking in the United States.

Net revenues for Juvederm Collection decreased 3% for the three months and 8% for the six months ended June 30, 2024.

In the United States, Juvederm Collection net revenues increased 10% for the three months primarily driven by market share uptake and decreased 1% for the six months ended June 30, 2024 primarily driven by the unfavorable impact of customer inventory destocking partially offset by market share uptake.

Internationally, Juvederm net revenues decreased 10% for the three months and 12% for the six months ended June 30, 2024 primarily driven by decreased consumer demand across international markets.

Net revenues for Botox Therapeutic increased 10% for the three months and 7% for the six months ended June 30, 2024 primarily driven by continued market share uptake as well as market growth.

Net revenues for Vraylar increased 18% for the three months and 20% for the six months ended June 30, 2024 primarily driven by continued market share uptake as well as market growth.

Net revenues for Ubrelvy increased 18% for the three months and 25% for the six months ended June 30, 2024 primarily driven by continued market share uptake as well as market growth.

Net revenues for Qulipta increased 56% for the three months and 73% for the six months ended June 30, 2024 primarily driven by continued strong market share uptake as well as market growth.

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Gross margin $ 10,260 $ 9,625 7 % $ 18,476 $ 17,864 3 %

as a % of net revenues 71 % 69 % 69 % 68 %

Gross margin as a percentage of net revenues was flat for the three months ended March 31, 2024 compared to the prior year.

Gross margin percentage for the three months ended March 31, 2024 was unfavorably impacted by changes in product mix, offset by lower amortization of intangibles.

Gross margin as a percentage of net revenues increased for the three and six months ended June 30, 2024 compared to the prior year.

Gross margin percentage for the three and six months ended June 30, 2024 was favorably impacted by lower amortization of intangibles.

Selling, General and Administrative

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Selling, general and administrative $ 3,377 $ 3,268 3 % $ 6,692 $ 6,307 6 %

as a % of net revenues 23 % 24 % 25 % 24 %

Selling, general and administrative (SG&A) expenses as a percentage of net revenues increased for the three months ended March 31, 2024 compared to the prior year.

SG&A expense percentage was unfavorably impacted by acquisition and integration costs incurred in connection with the ImmunoGen acquisition including cash-settled, post-closing expense for ImmunoGen employee incentive awards .

Selling, general and administrative (SG&A) expenses as a percentage of net revenues decreased for the three months and increased for the six months ended June 30, 2024 compared to the prior year.

SG&A expense percentage for the three months ended June 30, 2024 was favorably impacted by leverage from revenue growth .

SG&A expense percentage for the six months ended June 30, 2024 was unfavorably impacted by acquisition and integration costs incurred in connection with the ImmunoGen acquisition including cash-settled, post-closing expense for ImmunoGen employee incentive awards .

See Note 4 to the condensed consolidated financial statements for additional information.

2024 Form 10-Q |

Research and Development

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Research and development $ 1,948 $ 1,733 12 % $ 3,887 $ 4,025 (3) %

as a % of net revenues 13 % 12 % 15 % 15 %

Research and development (R&D) expenses as a percentage of net revenues decreased for the three months ended March 31, 2024 compared to the prior year primarily due to an intangible asset impairment charge of $630 million incurred during the three months ended March 31, 2023, partially offset by increased funding to support all stages of the company’s pipeline assets as well as acquisition and integration costs incurred in connection with the ImmunoGen acquisition including cash-settled, post-closing expense for ImmunoGen employee incentive awards .

Research and development (R&D) expenses as a percentage of net revenues increased for the three months and were flat for the six months ended June 30, 2024 compared to the prior year.

R&D expense percentage for the three months ended June 30, 2024 was unfavorably impacted by increased funding to support all stages of the company’s pipeline assets.

R&D expense percentage for the six months ended June 30, 2024 was favorably impacted by an intangible asset impairment charge of $630 million incurred during the six months ended June 30, 2023 offset by increased funding to support all stages of the company’s pipeline assets as well as acquisition and integration costs incurred in connection with the ImmunoGen acquisition including cash-settled, post-closing expense for ImmunoGen employee incentive awards .

See Note 4 to the condensed consolidated financial statements for additional information.

2024 Form 10-Q |

Acquired IPR&D and Milestones

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Acquired IPR&D and milestones $ 937 $ 280 $ 1,101 $ 430

Acquired IPR&D and milestones expense for the three and six months ended June 30, 2024 included a charge related to the upfront payment of $250 million to acquire Celsius Therapeutics.

See Note 4 to the condensed consolidated financial statements for additional information.

Other Non-Operating Expenses (Income)

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Other expense, net 1,345 1,412 1,931 3,216

Interest expense increased for the three months ended March 31, 2024 compared to the prior year primarily due to the incremental interest and debt issuance costs associated with financing the ImmunoGen and proposed Cerevel Therapeutics acquisitions as well as the impact of higher interest rates.

See Note 8 to the condensed consolidated financial statements for additional information related to debt issued to finance the ImmunoGen acquisition.

Interest income increased for the three months ended March 31, 2024 compared to the prior year primarily due to a higher average cash and cash equivalents balance and the impact of higher interest rates.

Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $660 million for the three months ended March 31, 2024 and $1.9 billion for the three months ended March 31, 2023.

Interest expense increased for the three and six months ended June 30, 2024 compared to the prior year primarily due to the incremental interest associated with financing the ImmunoGen and Cerevel Therapeutics acquisitions.

See Note 8 to the condensed consolidated financial statements for additional information related to debt issued to finance the ImmunoGen and Cerevel Therapeutics acquisitions.

Interest income increased for the three and six months ended June 30, 2024 compared to the prior year primarily due to a higher average cash and cash equivalents balance and the impact of higher interest rates.

Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $1.5 billion for the three months and $2.1 billion for the six months ended June 30, 2024 and $1.6 billion for the three months and $3.4 billion for the six months ended June 30, 2023.

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, 2024, the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake and the passage of time, partially offset by higher discount rates.

For the three months ended March 31, 2023 the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake, the passage of time, lower discount rates and favorable clinical trial results.

For the three and six months ended June 30, 2024, the change in fair value reflected higher estimated Skyrizi sales and the passage of time, partially offset by higher discount rates.

For the three and six months ended June 30, 2023 the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake and the passage of time.

The change in fair value for the three months ended June 30, 2023 is also partially offset by higher discount rates.

2024 Form 10-Q |

Income Tax Expense

The effective tax rate was 22% for the three months ended March 31, 2024 compared to 49% for the three months ended March 31, 2023.

The effective tax rate was 36% for the three months and 30% for the six months ended June 30, 2024 compared to 22% for the three months and 26% for the six months ended June 30, 2023.

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, changes in fair value of contingent consideration and business development activities, including ImmunoGen acquisition-related costs.

The decrease in the effective tax rate for the three months ended March 31, 2024 over the prior year was primarily due to changes in fair value of contingent consideration and impairment of certain intangible assets in the prior year.

2024 Form 10-Q |

The increase in the effective tax rate for the three months ended June 30, 2024 over the prior year was primarily due to business development activities.

The increase in the effective tax rate for the six months ended June 30, 2024 over the prior year was primarily due to business development activities in the current period, offset by decreased changes in fair value of contingent consideration and impairment of certain intangible assets in the prior period.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

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(in millions) 2024 2023

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Financing activities 4,722 (10,112)

Operating cash flows for the three months ended March 31, 2024 decreased compared to the prior year primarily due to ImmunoGen acquisition-related cash expenses, decreased results from operations driven by changes in product mix and increased R&D funding to support all stages of the company’s pipeline assets, partially offset by the timing of working capital.

Investing cash flows for the three months ended March 31, 2024 primarily included $9.8 billion cash consideration paid to acquire ImmunoGen offset by cash acquired of $591 million, payments made for other acquisitions and investments of $190 million and capital expenditures of $193 million.

Investing cash flows for the three months ended March 31, 2023 included payments made for other acquisitions and investments of $353 million and capital expenditures of $175 million.

Financing cash flows for the three months ended March 31, 2024 included the issuance of unsecured senior notes totaling $15.0 billion aggregate principal which were used to finance the acquisition of ImmunoGen and proposed acquisition of Cerevel Therapeutics.

Additionally, financing cash flows included the issuance and repayment of $5.0 billion under the term loan credit agreement and the repayment of $99 million of secured term notes assumed from ImmunoGen in conjunction with the acquisition.

Financing cash flows for the three months ended March 31, 2023 included repayments of $1.0 billion floating rate term loan and $350 million aggregate principal amount of the company’s 2.80% senior notes.

Financing cash flows also included cash dividend payments of $2.8 billion for the three months ended March 31, 2024 and $2.7 billion for the three months ended March 31, 2023.

Operating cash flows for the six months ended June 30, 2024 decreased compared to the prior year primarily due to the timing of working capital, higher contingent consideration payments classified as operating cash flows and decreased results from operations driven by ImmunoGen acquisition-related cash expenses.

Investing cash flows for the six months ended June 30, 2024 included $9.8 billion cash consideration paid to acquire ImmunoGen offset by cash acquired of $591 million, payments made for other acquisitions and investments of $1.0 billion and capital expenditures of $434 million.

Investing cash flows for the six months ended June 30, 2023 included payments made for other acquisitions and investments of $513 million and capital expenditures of $353 million.

Financing cash flows for the six months ended June 30, 2024 included the issuance of unsecured senior notes totaling $15.0 billion aggregate principal which were used to finance the acquisitions of ImmunoGen and Cerevel Therapeutics.

Additionally, financing cash flows included the issuance and repayment of $5.0 billion under the term loan credit agreement and repayments of €1.5 billion aggregate principal amount of 1.38% senior euro notes, €700 million aggregate principal amount of 1.25% senior euro notes, $1.0 billion aggregate principal amount of 3.85% senior notes and $99 million of secured term notes assumed from ImmunoGen in conjunction with the acquisition.

Financing cash flows for the six months ended June 30, 2023 included repayments of $1.0 billion floating rate term loan, $1.0 billion aggregate principal amount of 2.85% senior notes and $350 million aggregate principal amount of the company’s 2.80% senior notes.

Financing cash flows also included cash dividend payments of $5.5 billion for the six months ended June 30, 2024 and $5.3 billion for the six months ended June 30, 2023.

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

On February 15, 2024, the company announced that its board of directors declared a quarterly cash dividend of $1.55 per share for stockholders of record at the close of business on April 15, 2024, payable on May 15, 2024.

On June 21, 2024, the company announced that its board of directors declared a quarterly cash dividend of $1.55 per share for stockholders of record at the close of business on July 15, 2024, payable on August 15, 2024.

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.

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On February 16, 2023, AbbVie’s board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization.

AbbVie repurchased 5 million shares for $959 million during the three months ended March 31, 2024 and 10 million shares for $1.6 billion during the three months ended March 31, 2023.

During the three months ended March 31, 2024, the company issued and redeemed $1.7 billion of commercial paper.

There were no commercial paper borrowings outstanding as of March 31, 2024 and December 31, 2023.

AbbVie repurchased 5 million shares for $959 million during the six months ended June 30, 2024 and 10 million shares for $1.6 billion during the six months ended June 30, 2023.

Financing cash flows also included contingent consideration payments of $641 million for the six months ended June 30, 2023.

There were no contingent consideration payments classified as financing cash flows for the six months ended June 30, 2024.

2024 Form 10-Q |

During the six months ended June 30, 2024, the company issued and redeemed $1.7 billion of commercial paper.

There were no commercial paper borrowings outstanding as of June 30, 2024 and December 31, 2023.

AbbVie may issue additional commercial paper or retire commercial paper to meet liquidity requirements as needed.

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AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables.

2024 Form 10-Q |

Credit Facility, Access to Capital and Credit Ratings

Credit Facility

In December 2023, in connection with the acquisition of ImmunoGen and proposed acquisition of Cerevel Therapeutics, AbbVie entered into a $9.0 billion 364-day bridge credit agreement and $5.0 billion 364-day term loan credit agreement.

In December 2023, in connection with the acquisitions of ImmunoGen and Cerevel Therapeutics, AbbVie entered into a $9.0 billion 364-day bridge credit agreement and $5.0 billion 364-day term loan credit agreement.

In February, 2024, AbbVie borrowed and repaid $5.0 billion under the term loan credit agreement.

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

At March 31, 2024, 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, 2024 and December 31, 2023.

At June 30, 2024, 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, 2024 and December 31, 2023.

Access to Capital

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Credit Ratings

There were no changes in the company’s credit ratings during the three months ended March 31, 2024.

There were no changes in the company’s credit ratings during the six months ended June 30, 2024.

Unfavorable changes to the ratings may have an adverse impact on future financing arrangements;

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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, 2023.

There have been no significant changes in the company’s application of its critical accounting policies during the three months ended March 31, 2024.

There have been no significant changes in the company’s application of its critical accounting policies during the six months ended June 30, 2024.

2024 Form 10-Q |

FORWARD-LOOKING STATEMENTS

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For a discussion of the company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2023.

2024 Form 10-Q |

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What changed 10-Q

Item 2. Management’s Discussion and Analysis