What changed in this filing

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Item 1. Financial Statements

2024-11-04 compared with 2024-08-07 · 259 added, 156 removed, 816 unchanged (34% of the section changed)

3 unchanged sentences

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September 30,

(in millions, except per share data) 2024 2023 2024 2023

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Interest expense, net 591 398 1,550 1,306

Net foreign exchange loss 1 37 5 72

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

Net foreign exchange loss (gain) ( 3 ) 25 2 97

Other expense (income), net 1,159 ( 95 ) 3,090 3,121

Earnings before income tax expense 2,084 1,953 5,985 5,038

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023

Net earnings $ 1,564 $ 1,781 $ 4,309 $ 4,049

Foreign currency translation adjustments, net of tax expense (benefit) of $( 4 ) for the three months and $( 24 ) the six months ended June 30, 2024 and $( 6 ) for the three months and $ 6 six months ended June 30, 2023

Foreign currency translation adjustments, net of tax expense (benefit) of $ 25 for the three months and $ 1 the nine months ended September 30, 2024 and $( 17 ) for the three months and $( 11 ) nine months ended September 30, 2023

574 ( 457 ) 21 ( 279 )

Net investment hedging activities, net of tax expense (benefit) of $ 23 for the three months and $ 80 for the six months ended June 30, 2024 and $ 2 for the three months and $( 58 ) six months ended June 30, 2023

Net investment hedging activities, net of tax expense (benefit) of $( 91 ) for the three months and $( 11 ) for the nine months ended September 30, 2024 and $ 84 for the three months and $ 26 nine months ended September 30, 2023

( 330 ) 302 ( 39 ) 89

Pension and post-employment benefits, net of tax expense (benefit) of $ 3 for the three months and $ 4 for the six months ended June 30, 2024 and $( 4 ) for the three months and $ 10 for the six months ended June 30, 2023

Pension and post-employment benefits, net of tax expense (benefit) of $( 1 ) for the three months and $ 3 for the nine months ended September 30, 2024 and $ 1 for the three months and $ 11 for the nine months ended September 30, 2023

( 3 ) 2 15 38

Cash flow hedging activities, net of tax expense (benefit) of $( 2 ) for the three months and $ 5 for the six months ended June 30, 2024 and $( 4 ) for the three months and $( 8 ) for the six months ended June 30, 2023

Cash flow hedging activities, net of tax expense (benefit) of $( 8 ) for the three months and $( 3 ) for the nine months ended September 30, 2024 and $ 7 for the three months and $( 1 ) for the nine months ended September 30, 2023

( 62 ) 52 ( 26 ) ( 2 )

Other comprehensive loss ( 59 ) ( 20 ) ( 208 ) ( 53 )

Other comprehensive income (loss) 179 ( 101 ) ( 29 ) ( 154 )

Comprehensive income 1,743 1,680 4,280 3,895

6 unchanged sentences

Condensed Consolidated Balance Sheets

(in millions, except share data) June 30,

(in millions, except share data) September 30,

2024 December 31,

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Stockholders' equity

Common stock, $ 0.01 par value, 4,000,000,000 shares authorized, 1,830,226,561 shares issued as of June 30, 2024 and 1,823,046,087 as of December 31, 2023

Common stock held in treasury, at cost, 64,283,710 shares as of June 30, 2024 and 57,105,354 as of December 31, 2023

Common stock, $ 0.01 par value, 4,000,000,000 shares authorized, 1,831,415,039 shares issued as of September 30, 2024 and 1,823,046,087 as of December 31, 2023

Common stock held in treasury, at cost, 64,310,426 shares as of September 30, 2024 and 57,105,354 as of December 31, 2023

( 7,848 ) ( 6,533 )

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(in millions) Common shares outstanding Common stock Treasury stock Additional paid-in capital Retained earnings (accumulated deficit) Accumulated other comprehensive loss Noncontrolling interest Total

Balance at March 31, 2023 1,764 $ 18 $ ( 6,524 ) $ 19,619 $ 2,393 $ ( 2,232 ) $ 29 $ 13,303

Balance at June 30, 2023 1,765 $ 18 $ ( 6,528 ) $ 19,839 $ 1,789 $ ( 2,252 ) $ 32 $ 12,898

Net earnings attributable to AbbVie Inc.

5 unchanged sentences

Change in noncontrolling interest — — — — — — 3 3

Balance at September 30, 2023 1,765 $ 18 $ ( 6,525 ) $ 20,021 $ 933 $ ( 2,353 ) $ 35 $ 12,129

Balance at June 30, 2024 1,766 $ 18 $ ( 7,838 ) $ 20,879 $ ( 3,768 ) $ ( 2,513 ) $ 43 $ 6,821

Balance at March 31, 2024 1,766 $ 18 $ ( 7,829 ) $ 20,656 $ ( 2,384 ) $ ( 2,454 ) $ 40 $ 8,047

Net earnings attributable to AbbVie Inc.

— — — — 1,561 — — 1,561

Other comprehensive loss, net of tax — — — — — ( 59 ) — ( 59 )

Other comprehensive income, net of tax — — — — — 179 — 179

Dividends declared — — — — ( 2,757 ) — — ( 2,757 )

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Change in noncontrolling interest — — — — — — ( 4 ) ( 4 )

Balance at June 30, 2024 1,766 $ 18 $ ( 7,838 ) $ 20,879 $ ( 3,768 ) $ ( 2,513 ) $ 43 $ 6,821

Balance at September 30, 2024 1,767 $ 18 $ ( 7,848 ) $ 21,160 $ ( 4,964 ) $ ( 2,334 ) $ 39 $ 6,071

Balance at December 31, 2022 1,769 $ 18 $ ( 4,594 ) $ 19,245 $ 4,784 $ ( 2,199 ) $ 33 $ 17,287

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Change in noncontrolling interest — — — — — — 2 2

Balance at June 30, 2023 1,765 $ 18 $ ( 6,528 ) $ 19,839 $ 1,789 $ ( 2,252 ) $ 32 $ 12,898

Balance at September 30, 2023 1,765 $ 18 $ ( 6,525 ) $ 20,021 $ 933 $ ( 2,353 ) $ 35 $ 12,129

Balance at December 31, 2023 1,766 $ 18 $ ( 6,533 ) $ 20,180 $ ( 1,000 ) $ ( 2,305 ) $ 37 $ 10,397

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Change in noncontrolling interest — — — — — — 2 2

Balance at June 30, 2024 1,766 $ 18 $ ( 7,838 ) $ 20,879 $ ( 3,768 ) $ ( 2,513 ) $ 43 $ 6,821

Balance at September 30, 2024 1,767 $ 18 $ ( 7,848 ) $ 21,160 $ ( 4,964 ) $ ( 2,334 ) $ 39 $ 6,071

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statements of Cash Flows (unaudited)

Six months ended

Nine months ended

September 30,

(in millions) (brackets denote cash outflows) 2024 2023

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Cash flows from investing activities

Acquisition of businesses, net of cash acquired ( 9,199 ) —

Acquisitions of businesses, net of cash acquired ( 17,493 ) —

Other acquisitions and investments ( 1,232 ) ( 670 )

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Certain other reclassifications were made to conform the prior period interim condensed consolidated financial statements to the current period presentation.

On February 12, 2024, AbbVie completed its previously announced acquisition of ImmunoGen, Inc.

Refer to Note 4 and Note 8 for additional information regarding this acquisition.

AbbVie completed its previously announced acquisitions of ImmunoGen, Inc.

(ImmunoGen) on February 12, 2024 and Cerevel Therapeutics Holdings, Inc.

(Cerevel Therapeutics) on August 1, 2024.

See Note 4 and Note 8 for additional information regarding these acquisitions.

Recent Accounting Pronouncements

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023

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Interest expense, net $ 591 $ 398 $ 1,550 $ 1,306

(in millions) June 30,

(in millions) September 30,

2024 December 31,

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Property and Equipment, Net

(in millions) June 30,

(in millions) September 30,

2024 December 31,

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Property and equipment, net $ 5,141 $ 4,989

Depreciation expense was $ 184 million for the three months and $ 367 million for the six months ended June 30, 2024 and $ 190 million for the three months and $ 369 million for the six months ended June 30, 2023.

Depreciation expense was $ 191 million for the three months and $ 558 million for the nine months ended September 30, 2024 and $ 196 million for the three months and $ 565 million for the nine months ended September 30, 2023.

2024 Form 10-Q |

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions, except per share data) 2024 2023 2024 2023

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The number of common shares excluded was insignificant for all periods presented.

2024 Form 10-Q |

Note 4 Licensing, Acquisitions and Other Arrangements

Proposed Acquisition of Aliada Therapeutics Holdings, Inc.

Subsequent to September 30, 2024, on October 28, 2024, AbbVie announced that it entered into a definitive agreement to acquire Aliada Therapeutics, Inc.

(Aliada) including its lead program ALIA-1758.

ALIA-1758 is an anti-pyroglutamate amyloid beta (3pE-Aβ) antibody in development for the treatment of Alzheimer’s Disease.

Under the terms of the agreement, AbbVie will make an upfront cash payment of approximately $ 1.4 billion to acquire all outstanding equity of Aliada.

Closing of the proposed transaction is subject to regulatory approvals and other customary closing conditions.

Acquisition of Cerevel Therapeutics Holdings, Inc.

Subsequent to June 30, 2024, on August 1, 2024, AbbVie completed its previously announced acquisition of Cerevel Therapeutics Holdings, Inc.

(Cerevel Therapeutics).

Under the terms of the agreement, AbbVie acquired all outstanding shares of Cerevel Therapeutics for $ 45.00 per share in cash for a total value of approximately $ 8.7 billion.

On August 1, 2024, AbbVie completed its previously announced acquisition of Cerevel Therapeutics.

Cerevel Therapeutics is a clinical-stage biotechnology company focused on the discovery and development of differentiated therapies for neuroscience diseases.

Cerevel Therapeutics neuroscience pipeline includes multiple clinical-stage and preclinical candidates with the potential to treat several diseases including schizophrenia, Parkinson's disease and mood disorders.

Due to the proximity of the closing date of the acquisition to the date of filing this Quarterly Report on Form 10-Q, the initial accounting for the acquisition is not complete.

Significant, relevant information needed to complete the initial accounting, including the identification and measurement of the fair value of assets acquired and liabilities assumed, is pending.

As a result, it is not practicable to disclose the preliminary allocation of the purchase price to assets acquired and liabilities assumed or provide other related disclosures.

The accounting impact of this acquisition and the operating results of Cerevel Therapeutics will be included in the consolidated financial statements beginning in the third quarter of 2024.

Under the terms of the agreement, AbbVie acquired all outstanding shares of Cerevel Therapeutics for $ 45.00 per share in cash.

The total fair value of the consideration transferred to owners of Cerevel Therapeutics common stock was $ 8.7 billion ($ 8.3 billion, net of cash acquired).

The acquisition of Cerevel Therapeutics has been accounted for as a business combination using the acquisition method of accounting.

The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The valuation of assets acquired and liabilities assumed has not yet been finalized as of September 30, 2024.

As a result, AbbVie recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date.

Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value of intangible assets, goodwill and income taxes among other items.

The completion of the valuation will occur no later than one year from the acquisition date.

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:

(in millions)

Assets acquired and liabilities assumed

Cash and equivalents $ 361

Short-term investments 382

Prepaid expenses and other current assets 9

Property and equipment, net 25

Investments 121

Intangible assets, net 8,100

Other noncurrent assets 31

Current portion of long-term debt ( 400 )

Accounts payable and accrued liabilities ( 100 )

Long-term debt ( 246 )

Deferred income taxes ( 1,292 )

Other long-term liabilities ( 31 )

Total identifiable net assets 6,960

Goodwill 1,702

Total assets acquired and liabilities assumed $ 8,662

Intangible assets relate to $ 8.1 billion of acquired in-process research and development (IPR&D) associated with products that have not yet received regulatory approval.

The estimated fair values of identifiable intangible assets were determined using 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 these asset valuations include the estimated net cash flows for each year for each asset or product, the appropriate discount rate necessary to measure the risk inherent in each future cash flow stream, the life cycle of each asset, the potential regulatory and commercial success risk, competitive trends impacting the asset and each cash flow stream, as well as other factors.

2024 Form 10-Q |

The current portion of long-term debt assumed by AbbVie consists of $ 345 million aggregate principal of 2.5 % convertible senior notes due 2027.

Upon acquisition, the convertible senior notes became callable and note holders could redeem the convertible senior notes for cash at a premium.

As of the acquisition date, the convertible senior notes were recognized as current portion of long-term debt on the condensed consolidated balance sheets at an aggregate fair value of $ 400 million.

Following the acquisition date, the company repaid the convertible senior notes and there were no amounts outstanding as of September 30, 2024.

Long-term debt assumed by AbbVie relates to funding agreements entered into by Cerevel Therapeutics prior to the acquisition.

Under the agreements, Cerevel Therapeutics received funding to support development of tavapadon and agreed to repay regulatory milestones, sales milestones and royalties contingent upon approval of tavapadon by the U.S.

Food and Drug Administration (FDA).

The funding agreements were accounted for as financing arrangements and the fair value of the related financing liability was $ 246 million as of the acquisition date.

The estimated fair value of the financing liability was determined using a probability-weighted expected payment model for regulatory milestone payments and a Monte Carlo simulation model for sales milestones and royalty payments, which are then discounted to present value.

Assumptions inherent in the development of fair value include discount rates, estimated probabilities and timing of achieving milestones and estimated amounts of future sales.

See Note 8 for additional information.

Goodwill was calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

Specifically, the goodwill recognized from the acquisition of Cerevel Therapeutics represents expected synergies, including the ability to:

(i) expand AbbVie’s neuroscience pipeline, (ii) leverage AbbVie’s commercial, regulatory and clinical expertise to maximize Cerevel Therapeutic’s assets and (iii) enhance AbbVie’s existing neuroscience discovery capabilities.

The goodwill is not deductible for tax purposes.

AbbVie also assumed a licensing agreement entered into by Cerevel Therapeutics with Pfizer Inc.

(Pfizer) prior to the acquisition.

Under the agreement, Cerevel Therapeutics was granted an exclusive global license under certain Pfizer patent rights to develop, manufacture and commercialize compounds included in Cerevel Therapeutic’s pipeline.

AbbVie could make additional payments of up to $ 1.6 billion upon achievement of certain regulatory and commercial milestones for all programs.

Additionally, AbbVie will pay tiered royalties on net revenues.

Following the acquisition date, the operating results of Cerevel Therapeutics have been included in the condensed consolidated financial statements.

For the period from the acquisition date through September 30, 2024, operating losses attributable to Cerevel Therapeutics were $ 299 million, inclusive of $ 161 million of cash-settled, post-closing expense for Cerevel Therapeutics employee incentive awards.

AbbVie also issued 0.3 million RSUs to holders of Cerevel Therapeutics equity awards based on a conversion factor described in the transaction agreement.

Stock compensation expense related to RSUs issued at the acquisition date was not significant.

Acquisition-related expenses, which were comprised primarily of regulatory, financial advisory and legal fees, totaled $ 44 million for the nine months ended September 30, 2024 and were included in selling, general and administrative (SG&A) expense in the condensed consolidated statements of earnings .

Acquisition of ImmunoGen, Inc.

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The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The valuation of assets acquired and liabilities assumed has not yet been finalized as of June 30, 2024.

The valuation of assets acquired and liabilities assumed has not yet been finalized as of September 30, 2024.

As a result, AbbVie recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date.

1 unchanged sentence

The completion of the valuation will occur no later than one year from the acquisition date.

2024 Form 10-Q |

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:

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The fair value step-up adjustment to inventories of $ 179 million is being amortized to cost of products sold when the inventory is sold to customers, which is expected to be within approximately one year from the acquisition date.

Intangible assets relate to $ 7.3 billion of definite-lived intangible assets and $ 1.3 billion of acquired in-process research and development (IPR&D) associated with products that have not yet received regulatory approval.

Intangible assets relate to $ 7.3 billion of definite-lived intangible assets and $ 1.3 billion of acquired IPR&D associated with products that have not yet received regulatory approval.

The acquired definite-lived intangible assets consist of developed product rights and license agreements and are being amortized over a weighted-average estimated useful life of approximately 12 years using the estimated pattern of economic benefit.

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Other noncurrent assets primarily consist of $ 250 million of deferred tax assets.

2024 Form 10-Q |

The current portion of long-term debt assumed by AbbVie was repaid concurrent with the acquisition at the fair value of $ 99 million.

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Following the acquisition date, the operating results of ImmunoGen have been included in the condensed consolidated financial statements.

For the period from the acquisition date through June 30, 2024, net revenues attributable to ImmunoGen were $ 239 million and operating losses attributable to ImmunoGen were $ 562 million, inclusive of $ 349 million of cash-settled, post-closing expense for ImmunoGen employee incentive awards, $ 124 million of inventory fair value step-up amortization and $ 65 million of intangible asset amortization.

For the period from the acquisition date through September 30, 2024, net revenues attributable to ImmunoGen were $ 396 million and operating losses attributable to ImmunoGen were $ 582 million, inclusive of $ 349 million of cash-settled, post-closing expense for ImmunoGen employee incentive awards, $ 158 million of inventory fair value step-up amortization and $ 113 million of intangible asset amortization.

AbbVie also issued 0.3 million RSUs to holders of ImmunoGen equity awards based on a conversion factor described in the transaction agreement.

Stock compensation expense related to RSUs issued at the acquisition date was not significant.

Acquisition-related expenses, which were comprised primarily of regulatory, financial advisory and legal fees, totaled $ 59 million for the six months ended June 30, 2024 and were included in selling, general and administrative (SG&A) expense in the condensed consolidated statements of earnings .

2024 Form 10-Q |

Acquisition-related expenses, which were comprised primarily of regulatory, financial advisory and legal fees, totaled $ 59 million for the nine months ended September 30, 2024 and were included in SG&A expense in the condensed consolidated statements of earnings .

Pro Forma Financial Information

The following table presents the unaudited pro forma combined results of AbbVie and ImmunoGen for the three and six months ended June 30, 2024 and 2023 as if the acquisition of ImmunoGen had occurred on January 1, 2023:

The following table presents the unaudited pro forma combined results of AbbVie, ImmunoGen and Cerevel Therapeutics for the three and nine months ended September 30, 2024 and 2023 as if the acquisitions of ImmunoGen and Cerevel Therapeutics had occurred on January 1, 2023:

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(in millions) 2024 2023 2024 2023

1 unchanged sentence

Net earnings 1,714 1,400 4,583 2,309

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of AbbVie and ImmunoGen.

In order to reflect the occurrence of the acquisition on January 1, 2023 as required, the unaudited pro forma financial information includes adjustments to reflect incremental amortization expense to be incurred based on the current preliminary fair values of the identifiable intangible assets acquired;

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of AbbVie, ImmunoGen and Cerevel Therapeutics.

In order to reflect the occurrence of the acquisitions on January 1, 2023 as required, the unaudited pro forma financial information includes adjustments to reflect incremental amortization expense to be incurred based on the current preliminary fair values of the identifiable intangible assets acquired;

the incremental cost of products sold related to the fair value adjustments associated with acquisition date inventory;

the additional interest expense associated with the issuance of debt to finance the acquisition;

and the reclassification of acquisition-related costs incurred during the three and six months ended June 30, 2024 to the six months ended June 30, 2023.

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, 2023.

In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.

2024 Form 10-Q |

and the reclassification of acquisition-related costs incurred during the three and nine months ended September 30, 2024 to the nine months ended September 30, 2023.

The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisitions been completed on January 1, 2023.

Other Licensing & Acquisitions Activity

Cash outflows related to other acquisitions and investments totaled $ 1.0 billion for the six months ended June 30, 2024 and $ 513 million for the six months ended June 30, 2023.

Cash outflows related to other acquisitions and investments totaled $ 1.2 billion for the nine months ended September 30, 2024 and $ 670 million for the nine months ended September 30, 2023.

The following table summarizes acquired IPR&D and milestones expense:

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(in millions)

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AbbVie entered into several other individually insignificant collaborations, licensing agreements or other asset acquisitions in which the related upfront payments were recorded in acquired IPR&D and milestones expense.

2024 Form 10-Q |

Note 5 Collaborations

The company has ongoing transactions with other entities through collaboration agreements.

The following represent the significant collaboration agreements impacting the periods ended June 30, 2024 and 2023.

The following represent the significant collaboration agreements impacting the periods ended September 30, 2024 and 2023.

Collaboration with Janssen Biotech, Inc.

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Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share.

2024 Form 10-Q |

The following table shows the profit and cost sharing relationship between Janssen and AbbVie:

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(in millions) 2024 2023 2024 2023

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Global - AbbVie's share of other costs (included in respective line items) 38 59 120 171

AbbVie’s receivable from Janssen, included in accounts receivable, net, was $ 256 million at June 30, 2024 and $ 236 million at December 31, 2023.

AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was $ 270 million at June 30, 2024 and $ 307 million at December 31, 2023.

AbbVie’s receivable from Janssen, included in accounts receivable, net, was $ 233 million at September 30, 2024 and $ 236 million at December 31, 2023.

AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was $ 282 million at September 30, 2024 and $ 307 million at December 31, 2023.

Collaboration with Genentech, Inc.

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Royalties paid for Venclexta revenues outside the United States are also included in AbbVie’s cost of products sold.

2024 Form 10-Q |

The following table shows the profit and cost sharing relationship between Genentech and AbbVie:

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September 30,

(in millions) 2024 2023 2024 2023

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Foreign currency translation adjustments 51

Balance as of June 30, 2024 $ 33,386

(a) Goodwill additions related to the acquisition of ImmunoGen (see Note 4).

Balance as of September 30, 2024 $ 35,295

(a) Goodwill additions related to the acquisitions of ImmunoGen and Cerevel Therapeutics (see Note 4).

The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist.

As of June 30, 2024, there were no accumulated goodwill impairment losses.

2024 Form 10-Q |

As of September 30, 2024, there were no accumulated goodwill impairment losses.

Intangible Assets, Net

The following table summarizes intangible assets:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(in millions) Gross

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The intangible assets will be amortized using the estimated pattern of economic benefit.

Refer to Note 4 for additional information regarding the acquisition.

Amortization expense was $ 1.9 billion for the three months and $ 3.8 billion for the six months ended June 30, 2024 and $ 2.1 billion for the three months and $ 4.0 billion for the six months ended June 30, 2023.

See Note 4 for additional information regarding the acquisitions.

Amortization expense was $ 1.9 billion for the three months and $ 5.7 billion for the nine months ended September 30, 2024 and $ 2.0 billion for the three months and $ 6.1 billion for the nine months ended September 30, 2023.

Amortization expense was included in cost of products sold in the condensed consolidated statements of earnings.

In August 2023, as part of the Inflation Reduction Act (IRA) of 2022, the company’s oncology product Imbruvica sold in the United States (U.S.) was included on the list of products selected for negotiation by the Centers for Medicare & Medicaid Services.

The selection resulted in a significant decrease in the estimated future cash flows for the product and represented a triggering event which required the company to evaluate the underlying definite lived-intangible asset for impairment.

The company utilized a discounted cash flow analysis to determine the fair value of $ 1.9 billion, which was lower than the carrying value of $ 4.0 billion and resulted in a partial impairment of both the gross and net carrying amount as of August 29, 2023.

Based on the revised cash flows, the company recorded a pre-tax impairment charge of $ 2.1 billion to cost of products sold in the condensed consolidated statement

2024 Form 10-Q |

of earnings for the third quarter of 2023.

The fair value measurement was based on Level 3 inputs including estimated net revenues, cost of products sold, R&D costs, selling and marketing costs and discount rate.

Indefinite-Lived Intangible Assets

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The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist.

The increase in indefinite-lived intangible assets during 2024 was primarily due to the acquisition of ImmunoGen.

Refer to Note 4 for additional information regarding the acquisition.

The increase in indefinite-lived intangible assets during 2024 was primarily due to the acquisitions of ImmunoGen and Cerevel Therapeutics.

See Note 4 for additional information regarding the acquisitions.

During the first quarter of 2023, the company made a decision to revise the research and development plan for AGN-151607, a novel investigational neurotoxin for the prevention of postoperative atrial fibrillation in cardiac surgery patients.

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Based on the revised cash flows, the company recorded a pre-tax impairment charge of $ 630 million to research and development expense in the condensed consolidated statements of earnings for the first quarter of 2023.

2024 Form 10-Q |

Note 7 Restructuring Plans

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As a result, AbbVie management periodically approves individual restructuring plans to achieve these objectives.

As of June 30, 2024 and 2023, no such plans were individually significant.

Restructuring charges were $ 49 million for the three months and $ 64 million for the six months ended June 30, 2024 and $ 18 million for the three months and $ 45 million for the six months ended June 30, 2023.

As of September 30, 2024 and 2023, no such plans were individually significant.

Restructuring charges were $ 30 million for the three months and $ 94 million for the nine months ended September 30, 2024 and $ 10 million for the three months and $ 55 million for the nine months ended September 30, 2023.

These charges are recorded in cost of products sold, R&D expense and SG&A expense in the condensed consolidated statements of earnings based on the classification of the affected employees or the related operations.

The following table summarizes the cash activity in the restructuring reserve for the six months ended June 30, 2024:

The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, 2024:

(in millions)

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Payments and other adjustments ( 119 )

Accrued balance as of June 30, 2024 $ 182

Accrued balance as of September 30, 2024 $ 161

Allergan Integration Plan

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These costs consisted of severance and employee benefit costs (cash severance, non-cash severance including accelerated equity award compensation expense, retention and other termination benefits) and other integration ex penses.

The Allergan integration plan was substantially complete as of December 31, 2023 and the remaining accrual as of June 30, 2024 is not significant.

The Allergan integration plan was substantially complete as of December 31, 2023 and the remaining accrual as of September 30, 2024 is not significant.

The following table summarizes the prior year charges associated with the Allergan acquisition integration plan:

(in millions) Three Months Ended

June 30, 2023 Six Months Ended

June 30, 2023

September 30, 2023 Nine Months Ended

September 30, 2023

Cost of products sold $ 20 $ 66

2 unchanged sentences

Total charges $ 60 $ 202

2024 Form 10-Q |

Note 8 Financial Instruments and Fair Value Measures

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Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity.

These contracts, with notional amounts totaling $ 1.3 billion at June 30, 2024 and $ 1.8 billion at December 31, 2023, are designated as cash flow hedges and are recorded at fair value.

These contracts, with notional amounts totaling $ 2.6 billion at September 30, 2024 and $ 1.8 billion at December 31, 2023, are designated as cash flow hedges and are recorded at fair value.

The durations of these forward exchange contracts were generally less than 18 months.

Accumulated gains and losses as of June 30, 2024 are reclassified from accumulated other comprehensive income (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.

Accumulated gains and losses as of September 30, 2024 are reclassified from accumulated other comprehensive income (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.

In 2019, the company entered into treasury rate lock agreements with notional amounts totaling $ 10.0 billion to hedge exposure to variability in future cash flows resulting from changes in interest rates related to the issuance of long-term debt in connection with the acquisition of Allergan.

2 unchanged sentences

This gain is reclassified to interest expense, net over the term of the related debt.

2024 Form 10-Q |

In June 2023, the company entered into a cross-currency swap contract that matured in November 2023 with a notional amount totaling € 433 million to hedge the company’s exposure to changes in future cash flows of foreign currency denominated debt related to changes in foreign exchange rates.

4 unchanged sentences

Resulting gains or losses are reflected in net foreign exchange gain or loss in the condensed 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 $ 8.6 billion at June 30, 2024 and $ 7.9 billion at December 31, 2023.

These contracts had notional amounts totaling $ 7.7 billion at September 30, 2024 and $ 7.9 billion at December 31, 2023.

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.

The company had an aggregate principal amount of senior Euro notes designated as net investment hedges of € 3.2 billion at June 30, 2024 and € 5.4 billion at December 31, 2023.

In addition, the company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling € 7.1 billion, SEK 1.9 billion, CAD 750 million and CHF 70 million at June 30, 2024 and € 4.9 billion, SEK 1.4 billion, CAD 750 million and CHF 50 million at December 31, 2023.

The company had an aggregate principal amount of senior Euro notes designated as net investment hedges of € 3.2 billion at September 30, 2024 and € 5.4 billion at December 31, 2023.

In addition, the company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling € 6.2 billion, SEK 1.9 billion, CAD 750 million and CHF 70 million at September 30, 2024 and € 4.9 billion, SEK 1.4 billion, CAD 750 million and CHF 50 million at December 31, 2023.

The company uses the spot method of assessing hedge effectiveness for derivative instruments designated as net investment hedges.

Realized and unrealized gains and losses from these hedges are included in AOCI and the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense, net over the life of the hedging instrument.

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $ 3.5 billion at June 30, 2024 and $ 5.0 billion at December 31, 2023.

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $ 3.5 billion at September 30, 2024 and $ 5.0 billion at December 31, 2023.

The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt.

1 unchanged sentence

No amounts are excluded from the assessment of effectiveness for cash flow hedges or fair value hedges.

2024 Form 10-Q |

The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets:

1 unchanged sentence

Derivatives in liability position

(in millions) Balance sheet caption June 30,

(in millions) Balance sheet caption September 30,

2024 December 31,

2023 Balance sheet caption June 30,

2023 Balance sheet caption September 30,

2024 December 31,

1 unchanged sentence

Designated as cash flow hedges Prepaid expenses and other $ 8 $ 12 Accounts payable and accrued liabilities $ 45 $ 32

Designated as cash flow hedges Other assets 1 — Other long-term liabilities — —

Designated as net investment hedges Prepaid expenses and other 12 13 Accounts payable and accrued liabilities 32 66

5 unchanged sentences

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.

2024 Form 10-Q |

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive loss:

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss):

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023

4 unchanged sentences

Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax gains of $ 6 million into cost of products sold for foreign currency cash flow hedges and pre-tax gains of $ 21 million into interest expense, net for treasury rate lock agreement 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 in other comprehensive loss pre-tax gains of $ 50 million for the three months and $ 207 million for the six months ended June 30, 2024 and pre-tax gains of $ 36 million for the three months and pre-tax losses of $ 126 million for the six months ended June 30, 2023.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive income (loss) pre-tax losses of $ 151 million for the three months and pre-tax gains of $ 56 million for the nine months ended September 30, 2024 and pre-tax gains of $ 173 million for the three months and pre-tax gains of $ 47 million for the nine months ended September 30, 2023.

2024 Form 10-Q |

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 net gains (losses) reclassified out of AOCI into net earnings.

1 unchanged sentence

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) Statement of earnings caption 2024 2023 2024 2023

2 unchanged sentences

Designated as net investment hedges Interest expense, net 32 28 90 85

Not designated as hedges Net foreign exchange loss 34 4 16 34

Not designated as hedges Net foreign exchange loss (gain) ( 30 ) ( 41 ) ( 14 ) ( 7 )

Treasury rate lock agreements designated as cash flow hedges Interest expense, net 6 6 18 18

Cross-currency swap contracts designated as cash flow hedges Net foreign exchange loss — 8 — 8

Cross-currency swap contracts designated as cash flow hedges Net foreign exchange loss (gain) — ( 14 ) — ( 6 )

Interest rate swap contracts

6 unchanged sentences

• 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.

2024 Form 10-Q |

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 June 30, 2024:

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, 2024:

Basis of fair value measurement

10 unchanged sentences

Foreign currency contracts 202 — 202 —

Financing liability 253 — — 253

Contingent consideration 21,926 — — 21,926

Total liabilities $ 22,625 $ — $ 446 $ 22,179

2024 Form 10-Q |

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, 2023:

16 unchanged sentences

The derivatives entered into by the company were valued using observable market inputs including published interest rate curves and both forward and spot prices for foreign currencies.

The financing liability is related to funding agreements entered into by Cerevel Therapeutics prior to the acquisition and assumed by AbbVie.

The funding agreements represent financial instruments that are accounted for as financing arrangements and the company elected to account for the financing liability in accordance with the fair value option, as permitted under ASC 825 Financial Instruments .

The fair value measurement of the financing liability was determined based on significant unobservable inputs.

Potential payments are estimated by applying a probability-weighted expected payment model for regulatory milestone payments and a Monte Carlo simulation model for sales milestones and royalty payments, which are then discounted to present value.

Changes to the fair value of the financing liability can result from changes to one or a number of inputs, including discount rates, estimated probabilities and timing of achieving milestones and estimated amounts of future sales.

The change in fair value recognized in net earnings is recorded in other expense (income), net in the condensed consolidated statements of earnings and the change in fair value attributable to instrument-specific credit risk is recognized in other comprehensive loss.

Changes in fair value recognized in other expense (income), net and other comprehensive loss for the three months ended September 30, 2024 were not significant.

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.

1 unchanged sentence

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

2024 Form 10-Q |

employed in determining the appropriateness of certain of these inputs.

Significant judgment is employed in determining the appropriateness of certain 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.

2024 Form 10-Q |

The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Range Weighted average (a)

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Probability of payment for royalties by indication (b)

100 % - 100 %

Projected year of payments 2024 - 2034

(a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.

(b) Excluding approved indications, the estimated probability of payment was 89 % at June 30, 2024 and December 31, 2023.

(b) Excluding approved indications, the estimated probability of payment was 89 % at December 31, 2023.

There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy.

The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs:

Six months ended

Nine months ended

September 30,

(in millions) 2024 2023

3 unchanged sentences

Ending balance $ 21,926 $ 18,674

The change in fair value recognized in net earnings is recorded in other expense, net in the condensed consolidated statements of earnings.

The change in fair value recognized in net earnings is recorded in other expense (income), net in the condensed consolidated statements of earnings.

Contingent consideration payments of amounts up to the initial acquisition date fair value are classified as cash outflows from financing activities and payments of amounts in excess of the initial acquisition date fair value are classified as cash outflows from operating activities in the condensed consolidated statements of cash flows.

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 June 30, 2024 are shown in the table below:

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2024 are shown in the table below:

Basis of fair value measurement

18 unchanged sentences

The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur.

The carrying amount of these investments was $ 160 million as of June 30, 2024 and $ 159 million as of December 31, 2023.

No significant cumulative upward or downward adjustments have been recorded for these investments as of June 30, 2024.

The carrying amount of these investments was $ 153 million as of September 30, 2024 and $ 159 million as of December 31, 2023.

No significant cumulative upward or downward adjustments have been recorded for these investments as of September 30, 2024.

Concentrations of Risk

Of total net accounts receivable, three U.S.

wholesalers accounted for 77 % as of June 30, 2024 and 81 % as of December 31, 2023, and substantially all of AbbVie’s pharmaceutical product net revenues in the United States were to these three wholesalers.

wholesalers accounted for 78 % as of September 30, 2024 and 81 % as of December 31, 2023, and substantially all of AbbVie’s pharmaceutical product net revenues in the United States were to these three wholesalers.

Debt and Credit Facilities

22 unchanged sentences

Subsequent to the $ 15.0 billion issuance of senior notes, AbbVie terminated both the bridge and term loan credit agreements in the first quarter of 2024.

In February 2024, concurrent with the acquisition, the company assumed and repaid an ImmunoGen senior secured term loan at a fair value of $ 99 million.

Long-Term Debt Repayments

In February 2024, concurrent with the ImmunoGen acquisition, the company assumed and repaid an ImmunoGen senior secured term loan at a fair value of $ 99 million.

In connection with the acquisition of Cerevel Therapeutics, the company assumed $ 345 million aggregate principal of 2.5 % convertible senior notes due 2027.

Upon acquisition, the convertible senior notes became callable and note holders could redeem the convertible senior notes for cash at a premium.

As of the acquisition date, the convertible senior notes were recognized as current portion of long-term debt on the condensed consolidated balance sheets at an aggregate fair value of $ 400 million.

Following the acquisition date, the company repaid the convertible senior notes and there were no amounts outstanding as of September 30, 2024.

The company also assumed funding agreements entered into by Cerevel Therapeutics prior to the acquisition.

Food and Drug Administration (FDA).

In addition, upon acquisition the company has the option to satisfy payment obligations early by making a payment equal to the amount of funding provided to Cerevel Therapeutics plus a variable premium.

In all circumstances, total repayments under the funding agreements will not exceed $ 531 million in aggregate.

The funding agreements were accounted for as financing arrangements and the fair value of the related financing liability was $ 246 million as of the acquisition date.

In conjunction with the funding agreements, AbbVie also assumed security agreements entered into by Cerevel Therapeutics prior to the acquisition pursuant to which Cerevel Therapeutics granted the funding investors a security interest in the assets material to the development and commercialization of tavapadon in the United States.

Other Long-Term Debt

In May 2024, the company repaid a € 1.5 billion aggregate principal amount of 1.38 % senior euro notes at maturity.

In June 2024, the company repaid a € 700 million aggregate principal amount of 1.25 % senior euro notes and $ 1.0 billion aggregate principal amount of 3.85 % senior notes at maturity.

Subsequent to September 30, 2024, the company refinanced its $ 2.0 billion floating rate three-year term loan.

As part of the refinancing, the company repaid the existing $ 2.0 billion term loan due May 2025 and borrowed $ 2.0 billion under a new term loan due April 2027.

In January 2023, the company repaid a $ 1.0 billion floating rate three-year term loan that was scheduled to mature in May 2023.

2 unchanged sentences

Short-Term Borrowings

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.

The weighted average interest rate on commercial paper borrowings was 5.54 % for the six months ended June 30, 2024.

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

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

The weighted average interest rate on commercial paper borrowings was 5.54 % for the nine months ended September 30, 2024.

2024 Form 10-Q |

In March 2023, AbbVie entered into an amended and restated five-year revolving credit facility.

1 unchanged sentence

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

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 facilities as of June 30, 2024 and December 31, 2023.

2024 Form 10-Q |

At September 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 facilities as of September 30, 2024 and December 31, 2023.

Note 9 Post-Employment Benefits

3 unchanged sentences

Three months ended

June 30, Six months ended

June 30, Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30, Three months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023 2024 2023 2024 2023

4 unchanged sentences

Amortization of actuarial loss 13 4 39 12 4 3 13 9

Net periodic benefit cost $ 1 $ ( 1 ) $ 2 $ ( 2 ) $ 17 $ 14 $ 33 $ 25

The components of net periodic benefit cost other than service cost are included in other expense, net in the condensed consolidated statements of earnings.

Net periodic benefit cost (credit) $ 1 $ ( 1 ) $ 3 $ ( 3 ) $ 16 $ 12 $ 49 $ 37

The components of net periodic benefit cost other than service cost are included in other expense (income), net in the condensed consolidated statements of earnings.

2024 Form 10-Q |

Note 10 Equity

2 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023

5 unchanged sentences

After-tax compensation expense $ 148 $ 104 $ 620 $ 511

In addition to stock-based compensation expense included in the table above and in connection with the acquisition of ImmunoGen, AbbVie incurred $ 349 million of cash-settled, post-closing expense for ImmunoGen employee incentive awards, of which $ 192 million was recorded in SG&A expenses, $ 126 million was recorded in R&D expenses and $ 31 million was recorded in cost of products sold in the condensed consolidated statements of earnings for the six months ended June 30, 2024.

Refer to Note 4 for additional information regarding the ImmunoGen acquisition.

In addition to stock-based compensation expense included in the table above and in connection with the acquisitions of ImmunoGen and Cerevel Therapeutics, AbbVie incurred cash-settled, post-closing expense for ImmunoGen and Cerevel Therapeutics employee incentive awards, which is summarized in the table below:

(in millions) Three months ended September 30, 2024

Nine months ended September 30, 2024

Cost of products sold $ 5 $ 36

Research and development

Selling, general and administrative 98 290

Total post-closing cash settled expense

Stock Options

During the six months ended June 30, 2024, primarily in connection with the company's annual grant, AbbVie granted 0.6 million stock options with a weighted-average grant-date fair value of $ 31.53 .

As of June 30, 2024, $ 9 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years .

During the nine months ended September 30, 2024, primarily in connection with the company's annual grant, AbbVie granted 0.6 million stock options with a weighted-average grant-date fair value of $ 31.53 .

As of September 30, 2024, $ 8 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years .

RSUs and Performance Shares

During the six months ended June 30, 2024, primarily in connection with the company's annual grant, AbbVie granted 5.0 million RSUs and performance shares with a weighted-average grant-date fair value of $ 176.13 .

In connection with the ImmunoGen acquisition, during the first quarter of 2024, AbbVie issued 0.3 million RSUs to holders of ImmunoGen equity awards based on a conversion factor described in the transaction agreement.

Refer to Note 4 for additional information regarding the ImmunoGen acquisition.

As of June 30, 2024, $ 840 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years .

2024 Form 10-Q |

During the nine months ended September 30, 2024, primarily in connection with the company's annual grant, AbbVie granted 5.5 million RSUs and performance shares with a weighted-average grant-date fair value of $ 176.43 .

During the nine months ended September 30, 2024 and in connection with the ImmunoGen and Cerevel Therapeutics acquisitions, AbbVie issued 0.6 million RSUs to holders of ImmunoGen and Cerevel Therapeutics equity awards based on a conversion factor described in each of the transaction agreements.

See Note 4 for additional information regarding the ImmunoGen and Cerevel Therapeutics acquisitions.

As of September 30, 2024, $ 799 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years .

Cash Dividends

7 unchanged sentences

02/15/24 05/15/24 $ 1.55 02/16/23 05/15/23 $ 1.48

2024 Form 10-Q |

Stock Repurchase Program

3 unchanged sentences

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

AbbVie's remaining stock repurchase authorization was approximately $ 3.9 billion as of June 30, 2024.

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

AbbVie's remaining stock repurchase authorization was approximately $ 3.9 billion as of September 30, 2024.

Accumulated Other Comprehensive Loss

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2024:

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2024:

(in millions) Foreign currency

8 unchanged sentences

Net current-period other comprehensive income (loss) 21 ( 39 ) 15 ( 26 ) ( 29 )

Balance as of June 30, 2024 $ ( 1,659 ) $ 356 $ ( 1,470 ) $ 260 $ ( 2,513 )

Other comprehensive loss for the six months ended June 30, 2024 included foreign currency translation adjustments totaling a loss of $ 553 million principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets and the offsetting impact of net investment hedging activities totaling a gain of $ 291 million.

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2023:

Balance as of September 30, 2024 $ ( 1,085 ) $ 26 $ ( 1,473 ) $ 198 $ ( 2,334 )

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2023:

(in millions) Foreign currency

8 unchanged sentences

Net current-period other comprehensive income (loss) ( 279 ) 89 38 ( 2 ) ( 154 )

Balance as of June 30, 2023 $ ( 1,335 ) $ 251 $ ( 1,422 ) $ 254 $ ( 2,252 )

Other comprehensive loss for the six months ended June 30, 2023 included foreign currency translation adjustments totaling a gain of $ 178 million principally due to the impact of the strengthening of the Euro on the translation of the company’s Euro-denominated assets and the offsetting impact of net investment hedging activities totaling a loss of $ 213 million.

Balance as of September 30, 2023 $ ( 1,792 ) $ 553 $ ( 1,420 ) $ 306 $ ( 2,353 )

Other comprehensive loss for the nine months ended September 30, 2023 included foreign currency translation adjustments totaling a loss of $ 279 million principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets and the offsetting impact of net investment hedging activities totaling a gain of $ 89 million.

2024 Form 10-Q |

1 unchanged sentence

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) (brackets denote gains) 2024 2023 2024 2023

15 unchanged sentences

Gains on cross-currency swap contracts (d)

— ( 8 ) — ( 8 )

Total reclassifications, net of tax $ ( 20 ) $ ( 1 ) $ ( 46 ) $ ( 63 )

2 unchanged sentences

(d) Amounts are included in net foreign exchange loss (see Note 8).

(d) Amounts are included in net foreign exchange loss (gain) (see Note 8).

Note 11 Income Taxes

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 was 25 % for the three months and 28 % for the nine months ended September 30, 2024 compared to 9 % for the three months and 20 % for the nine months ended September 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 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.

It is reasonably possible that the company’s gross unrecognized tax benefits balance may change within the next 12 months by up to $ 162 million.

The increase in the effective tax rate for the three months ended September 30, 2024 over the prior year was primarily due to changes in fair value of contingent consideration, impact of foreign operations and business development activities.

The increase in the effective tax rate for the nine months ended September 30, 2024 over the prior year was primarily due to the impact of foreign operations and business development activities.

It is reasonably possible that the company’s gross unrecognized tax benefits balance may change within the next 12 months by up to $ 58 million in connection with statute of limitation expirations.

The company has various federal, state and foreign examinations ongoing.

Finalizing examinations with the relevant taxing authorities can include formal administrative and legal proceedings, and as a result, we cannot reasonably estimate the timing of resolution for certain unrecognized tax benefits.

Subsequent to September 30, 2024, the company was notified that the administrative proceeding related to its U.S.

federal income tax examination for certain tax years was substantially completed.

Final resolution of examination of such years may occur in the fourth quarter of 2024.

The company anticipates that final resolution will result in a decrease in the gross amount of unrecognized tax benefits on the condensed consolidated balance sheets and recognition of an income tax benefit in the condensed consolidated statement of earnings, which could be material.

The Company does not anticipate that such resolution will have a significant impact on its cash flows.

2024 Form 10-Q |

1 unchanged sentence

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.

The most significant matters are described below.

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 $ 2.4 billion as of September 30, 2024 and $ 2.0 billion as of December 31, 2023.

For litigation matters discussed below for which a loss is probable or reasonably possible, the company is unable to estimate the possible loss or range of loss, if any, beyond the amounts accrued.

14 unchanged sentences

(a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) with three generic companies violated federal antitrust law, and also alleging that 2011 patent litigation by Abbott with two generic companies regarding AndroGel was sham litigation and the settlements of those litigations violated federal antitrust law.

Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys’ fees.

In September 2024, AbbVie and plaintiffs reached an agreement to resolve this lawsuit.

In November 2022, the State of Oregon filed a lawsuit in the Multnomah County, Oregon Circuit Court making similar allegations regarding the 2011 patent litigation with one of the generic companies.

Lawsuits were filed against Forest Laboratories, LLC and others generally alleging that 2012 and 2013 patent litigation settlements involving Bystolic with six generic manufacturers violated 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, purported class actions filed on behalf of direct and indirect purchasers of Bystolic, were consolidated as In re:

Bystolic Antitrust Litigation in the United States District Court for the Southern District of New York.

In February 2023, the court granted Forest Laboratories’ motion to dismiss the cases, dismissing them with prejudice.

In May 2024, the United States Court of Appeals for the Second Circuit affirmed that dismissal.

Government Proceedings

5 unchanged sentences

The plaintiffs in these lawsuits, which include states, counties, cities, other municipal entities, Native American tribes, union trust funds and other third-party payors, private hospitals and personal injury claimants, generally seek compensatory and punitive damages.

Of these approximately 460 lawsuits, approximately 45 of them are brought by states, counties, cities, and other municipal entities, approximately 25 of which are in the process of being dismissed pursuant to the previously announced

2024 Form 10-Q |

settlement for which AbbVie recorded a charge of $ 2.1 billion to selling, general and administrative expense in the consolidated statement of earnings in the second quarter of 2022.

Of these approximately 440 lawsuits, approximately 30 of them are brought by states, counties, cities, and other municipal entities, approximately 10 of which are in the process of being dismissed pursuant to the previously announced settlement.

Another approximately 45 of the approximately 440 lawsuits are covered by a proposed class settlement between Allergan and a class of acute care hospitals, which is subject to court approval and other contingencies.

In March 2023, AbbVie Inc.

3 unchanged sentences

The petition disputes the Internal Revenue Service determination concerning a $ 572 million income tax benefit recorded in 2014 related to a payment made to a third party for the termination of a proposed business combination.

2024 Form 10-Q |

Shareholder and Securities Litigation

5 unchanged sentences

Gonzalez, et al., were filed in the United States District Court for the Northern District of Illinois, alleging that certain AbbVie directors and officers breached fiduciary and other legal duties in making or allowing alleged misstatements regarding the potential effect that safety information about another company’s product would have on the Food and Drug Administration’s approval and labeling for AbbVie’s Rinvoq.

In October 2024, the court granted defendants’ motion to dismiss without prejudice.

Product Liability and General Litigation

21 unchanged sentences

Reddy’s Laboratories, Inc.

and Alembic Pharmaceuticals Ltd., Alembic Pharmaceuticals, Inc., and Alembic Global Holdings SA.

AbbVie alleges defendants’ proposed generic venetoclax products infringe certain patents and seeks declaratory and injunctive relief.

4 unchanged sentences

AbbVie alleges defendants’ proposed generic upadacitinib products infringe certain patents and seeks declaratory and injunctive relief.

2024 Form 10-Q |

is seeking to enforce patent rights related to ubrogepant (a drug sold under the trademark Ubrelvy).

16 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023

36 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(in millions) 2024 2023 2024 2023

39 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 1. Financial Statements