AbbVie Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Consolidated Financial Statements Consolidated Statements of Earnings 52 Consolidated Statements of Comprehensive Income 53 Consolidated Balance Sheets 54 Consolidated Statements of Equity (Deficit) 55 Consolidated Statements of Cash Flows 56 Notes to Consolidated Financial Statements Note 1 Background 57 Note 2 Summary of Significant Accounting Policies 57 Note 3 Supplemental Financial Information 62 Note 4 Earnings Per Share 63 Note 5 Licensing, Acquisitions and Other Arrangements 63 Note 6 Collaborations 69 Note 7 Goodwill and Intangible Assets 70 Note 8 Restructuring Plans 72 Note 9 Leases 73 Note 10 Debt, Credit Facilities and Commitments and Contingencies 75 Note 11 Financial Instruments and Fair Value Measures 77 Note 12 Post-Employment Benefits 83 Note 13 Equity 87 Note 14 Income Taxes 91 Note 15 Legal Proceedings and Contingencies 95 Note 16 Segment and Geographic Area Information 97 Note 17 Fourth Quarter Financial Results (unaudited) 99 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 100 51 | 2025 Form 10-K AbbVie Inc. and Subsidiaries Consolidated Statements of Earnings years ended December 31 (in millions, except per share data) 2025 2024 2023 Net revenues $ 61,160 $ 56,334 $ 54,318 Cost of products sold 18,204 16,904 20,415 Selling, general and administrative 14,010 14,752 12,872 Research and development 9,096 12,791 7,675 Acquired IPR&D and milestones 5,016 2,757 778 Other operating income ( 241 ) ( 7 ) ( 179 ) Total operating costs and expenses 46,085 47,197 41,561 Operating earnings 15,075 9,137 12,757 Interest expense, net 2,627 2,160 1,684 Net foreign exchange loss 58 21 146 Other expense, net 5,793 3,240 4,677 Earnings before income tax expense 6,597 3,716 6,250 Income tax expense (benefit) 2,364 ( 570 ) 1,377 Net earnings 4,233 4,286 4,873 Net earnings attributable to noncontrolling interest 7 8 10 Net earnings attributable to AbbVie Inc. $ 4,226 $ 4,278 $ 4,863 Per share data Basic earnings per share attributable to AbbVie Inc. $ 2.37 $ 2.40 $ 2.73 Diluted earnings per share attributable to AbbVie Inc. $ 2.36 $ 2.39 $ 2.72 Weighted-average basic shares outstanding 1,769 1,769 1,768 Weighted-average diluted shares outstanding 1,773 1,773 1,773 The accompanying notes are an integral part of these consolidated financial statements. 2025 Form 10-K | 52 AbbVie Inc. and Subsidiaries Consolidated Statements of Comprehensive Income years ended December 31 (in millions) 2025 2024 2023 Net earnings $ 4,233 $ 4,286 $ 4,873 Foreign currency translation adjustments, net of tax expense (benefit) of $ 63 in 2025, $( 39 ) in 2024 and $ 15 in 2023 1,481 ( 1,008 ) 407 Net investment hedging activities, net of tax expense (benefit) of $( 266 ) in 2025, $ 133 in 2024 and $( 109 ) in 2023 ( 971 ) 484 ( 399 ) Pension and post-employment benefits, net of tax expense (benefit) of $ 98 in 2025, $ 206 in 2024 and $( 6 ) in 2023 421 824 ( 30 ) Cash flow hedging activities, net of tax expense (benefit) of $( 18 ) in 2025, $ 16 in 2024 and $( 19 ) in 2023 ( 150 ) 80 ( 84 ) Other comprehensive income (loss) $ 781 $ 380 $ ( 106 ) Comprehensive income 5,014 4,666 4,767 Comprehensive income attributable to noncontrolling interest 7 8 10 Comprehensive income attributable to AbbVie Inc. $ 5,007 $ 4,658 $ 4,757 The accompanying notes are an integral part of these consolidated financial statements. 53 | 2025 Form 10-K AbbVie Inc. and Subsidiaries Consolidated Balance Sheets as of December 31 (in millions, except share data) 2025 2024 Assets Current assets Cash and equivalents $ 5,229 $ 5,524 Short-term investments 28 31 Accounts receivable, net 12,589 10,919 Inventories 4,951 4,181 Prepaid expenses and other 6,265 4,927 Total current assets 29,062 25,582 Investments 268 279 Property and equipment, net 5,628 5,134 Intangible assets, net 52,641 60,068 Goodwill 35,640 34,956 Other assets 10,721 9,142 Total assets $ 133,960 $ 135,161 Liabilities and Equity Current liabilities Short-term borrowings $ 2,499 $ — Current portion of long-term debt and finance lease obligations 6,056 6,804 Accounts payable and accrued liabilities 34,734 31,945 Total current liabilities 43,289 38,749 Long-term debt and finance lease obligations 58,941 60,340 Deferred income taxes 2,389 2,579 Other long-term liabilities 32,569 30,129 Commitments and contingencies Stockholders' equity (deficit) Common stock, $ 0.01 par value, 4,000,000,000 shares authorized, 1,838,678,628 shares issued as of December 31, 2025 and 1,831,594,494 as of December 31, 2024 18 18 Common stock held in treasury, at cost, 70,802,593 shares as of December 31, 2025 and 66,337,508 as of December 31, 2024 ( 9,146 ) ( 8,201 ) Additional paid-in capital 22,495 21,333 Accumulated deficit ( 15,493 ) ( 7,900 ) Accumulated other comprehensive loss ( 1,144 ) ( 1,925 ) Total stockholders' equity (deficit) ( 3,270 ) 3,325 Noncontrolling interest 42 39 Total equity (deficit) ( 3,228 ) 3,364 Total liabilities and equity $ 133,960 $ 135,161 The accompanying notes are an integral part of these consolidated financial statements. 2025 Form 10-K | 54 AbbVie Inc. and Subsidiaries Consolidated Statements of Equity (Deficit) years ended December 31 (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 December 31, 2022 1,769 $ 18 $ ( 4,594 ) $ 19,245 $ 4,784 $ ( 2,199 ) $ 33 $ 17,287 Net earnings attributable to AbbVie Inc. — — — — 4,863 — — 4,863 Other comprehensive loss, net of tax — — — — — ( 106 ) — ( 106 ) Dividends declared — — — — ( 10,647 ) — — ( 10,647 ) Purchases of treasury stock ( 12 ) — ( 1,978 ) — — — — ( 1,978 ) Stock-based compensation plans and other 9 — 39 935 — — — 974 Change in noncontrolling interest — — — — — — 4 4 Balance at December 31, 2023 1,766 18 ( 6,533 ) 20,180 ( 1,000 ) ( 2,305 ) 37 10,397 Net earnings attributable to AbbVie Inc. — — — — 4,278 — — 4,278 Other comprehensive income, net of tax — — — — — 380 — 380 Dividends declared — — — — ( 11,178 ) — — ( 11,178 ) Purchases of treasury stock ( 9 ) — ( 1,703 ) — — — — ( 1,703 ) Stock-based compensation plans and other 8 — 35 1,153 — — — 1,188 Change in noncontrolling interest — — — — — — 2 2 Balance at December 31, 2024 1,765 18 ( 8,201 ) 21,333 ( 7,900 ) ( 1,925 ) 39 3,364 Net earnings attributable to AbbVie Inc. — — — — 4,226 — — 4,226 Other comprehensive income, net of tax — — — — — 781 — 781 Dividends declared — — — — ( 11,819 ) — — ( 11,819 ) Purchases of treasury stock ( 5 ) — ( 980 ) — — — — ( 980 ) Stock-based compensation plans and other 8 — 35 1,162 — — — 1,197 Change in noncontrolling interest — — — — — — 3 3 Balance at December 31, 2025 1,768 $ 18 $ ( 9,146 ) $ 22,495 $ ( 15,493 ) $ ( 1,144 ) $ 42 $ ( 3,228 ) The accompanying notes are an integral part of these consolidated financial statements. 55 | 2025 Form 10-K AbbVie Inc. and Subsidiaries Consolidated Statements of Cash Flows years ended December 31 (in millions) (brackets denote cash outflows) 2025 2024 2023 Cash flows from operating activities Net earnings $ 4,233 $ 4,286 $ 4,873 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation 762 764 752 Amortization of intangible assets 7,377 7,622 7,946 Deferred income taxes ( 492 ) ( 1,449 ) ( 2,889 ) Change in fair value of contingent consideration liabilities 6,495 3,771 5,128 Payments of contingent consideration liabilities ( 2,865 ) ( 1,995 ) ( 870 ) Stock-based compensation 955 911 747 Acquired IPR&D and milestones 5,016 2,757 778 Non-cash litigation reserve adjustments, net of cash payments ( 933 ) 508 ( 443 ) Impairment of intangible assets 847 4,476 4,229 Other, net ( 3 ) ( 63 ) ( 225 ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable ( 1,490 ) 207 66 Inventories ( 234 ) ( 319 ) ( 417 ) Prepaid expenses and other assets ( 827 ) 361 ( 188 ) Accounts payable and other liabilities 951 177 3,840 Income tax assets and liabilities, net ( 762 ) ( 3,208 ) ( 488 ) Cash flows from operating activities 19,030 18,806 22,839 Cash flows from investing activities Acquisition of businesses, net of cash acquired ( 204 ) ( 17,493 ) — Other acquisitions and investments, net of cash acquired ( 5,237 ) ( 3,024 ) ( 1,223 ) Acquisitions of property and equipment ( 1,214 ) ( 974 ) ( 777 ) Purchases of investment securities ( 35 ) ( 73 ) ( 77 ) Sales and maturities of investment securities 76 555 55 Other, net ( 29 ) 189 13 Cash flows from investing activities ( 6,643 ) ( 20,820 ) ( 2,009 ) Cash flows from financing activities Net change in commercial paper borrowings with original maturities of three months or less 499 — — Proceeds from issuance of other short-term borrowings 4,798 5,008 — Repayments of other short-term borrowings ( 2,798 ) ( 5,008 ) — Proceeds from issuance of long-term debt 3,994 16,963 — Repayments of long-term debt and finance lease obligations ( 6,797 ) ( 9,613 ) ( 4,149 ) Debt issuance costs ( 23 ) ( 99 ) ( 38 ) Dividends paid ( 11,657 ) ( 11,025 ) ( 10,539 ) Purchases of treasury stock ( 980 ) ( 1,708 ) ( 1,972 ) Proceeds from the exercise of stock options 172 214 180 Payments of contingent consideration liabilities — — ( 752 ) Other, net 68 57 48 Cash flows from financing activities ( 12,724 ) ( 5,211 ) ( 17,222 ) Effect of exchange rate changes on cash and equivalents 42 ( 65 ) 5 Net change in cash and equivalents ( 295 ) ( 7,290 ) 3,613 Cash and equivalents, beginning of year 5,524 12,814 9,201 Cash and equivalents, end of year $ 5,229 $ 5,524 $ 12,814 Other supplemental information Interest paid, net of portion capitalized $ 3,002 $ 2,811 $ 2,469 The accompanying notes are an integral part of these consolidated financial statements. 2025 Form 10-K | 56 AbbVie Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1 Background Background The principal business of AbbVie Inc. (AbbVie or the company) is the discovery, development, manufacturing and sale of a broad line of therapies that address some of the world's most complex and serious diseases. AbbVie's products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. Certain products (including aesthetic products and devices) are also sold directly to physicians and other licensed healthcare providers. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market, works through largely centralized national payers systems to agree on reimbursement terms. AbbVie was incorporated in Delaware on April 10, 2012. On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories (Abbott) of 100 % of the outstanding common stock of AbbVie to Abbott's shareholders. Note 2 Summary of Significant Accounting Policies Use of Estimates The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for rebates, pension and other post-employment benefits, income taxes, litigation, valuation of goodwill, intangible assets and contingent consideration liabilities. Basis of Consolidation The consolidated financial statements include the accounts of AbbVie and all of its subsidiaries in which a controlling interest is maintained. Controlling interest is determined by majority ownership interest and the absence of substantive third-party participating rights or, in the case of variable interest entities, where AbbVie is determined to be the primary beneficiary. Investments in companies over which AbbVie has a significant influence but not a controlling interest are accounted for using the equity method with AbbVie's share of earnings or losses reported in other expense, net in the consolidated statements of earnings. Intercompany balances and transactions are eliminated. Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period presentation. Revenue Recognition AbbVie recognizes revenue when control of promised goods or services is transferred to the company’s customers, in an amount that reflects the consideration AbbVie expects to be entitled to in exchange for those goods or services. Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue. AbbVie generates revenue primarily from product sales. For the majority of sales, the company transfers control, invoices the customer and recognizes revenue upon shipment to the customer. The company recognizes shipping and handling costs as an expense in cost of products sold when the company transfers control to the customer. Payment terms vary depending on the type and location of the customer, are based on customary commercial terms and are generally less than one year. AbbVie does not adjust revenue for the effects of a significant financing component for contracts where AbbVie expects the period between the transfer of the good or service and collection to be one year or less. Cash discounts, rebates and chargebacks, sales incentives, product returns and certain other adjustments are accounted for as variable consideration. Provisions for variable consideration are based on current pricing, executed contracts, government pricing legislation and historical data and are provided for in the period the related revenues are recorded. Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer. For each type of rebate, factors used in the calculation of the accrual include the identification of the products subject to the rebate, the applicable price terms and the estimated lag time between sale and payment of the rebate, which can be significant. 57 | 2025 Form 10-K In addition to revenue from contracts with customers, the company also recognizes certain collaboration revenues. See Note 6 for additional information related to the collaborations with Janssen Biotech, Inc. and its affiliates (Janssen) and Genentech, Inc. (Genentech). Additionally, see Note 16 for disaggregation of revenue by product and geography. Research and Development Expenses Internal research and development (R&D) costs are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Acquired IPR&D and Milestones Expenses In an asset acquisition, payments incurred prior to regulatory approval to acquire rights to in-process R&D projects are expensed as acquired IPR&D and milestones expense in the consolidated statements of earnings unless the project has an alternative future use. These costs include upfront and development milestone payments related to R&D collaborations, licensing arrangements, or other asset acquisitions that provide rights to develop, manufacture and/or sell pharmaceutical products. Where contingent development milestone payments are due to third parties, prior to regulatory approval, the payment obligations are expensed when the milestone results are achieved. Regulatory and commercial milestone payments made to third parties subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of products sold over the remaining useful life of the related product. Business Combinations AbbVie utilizes the acquisition method of accounting for business combinations. This method requires, among other things, that results of operations of acquired companies are included in AbbVie's results of operations beginning on the acquisition date and that assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Any excess of the fair value of consideration transferred over the fair value of the net assets acquired is recognized as goodwill. Contingent consideration liabilities are recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liabilities are recognized in other expense, net in the consolidated statements of earnings. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred. In a business combination, the fair value of IPR&D projects acquired is capitalized and accounted for as indefinite-lived intangible assets until the underlying project receives regulatory approval, at which point the intangible asset will be accounted for as a definite-lived intangible asset, or discontinuation, at which point the intangible asset will be written off. R&D costs incurred by the company after the acquisition are expensed to R&D in the consolidated statements of earnings when incurred. Collaborations and Other Arrangements The company enters into collaborative agreements with third parties to develop and commercialize drug candidates. Collaborative activities may include joint research and development and commercialization of new products. AbbVie generally receives certain licensing rights under these arrangements. These collaborations often require upfront payments and may include additional milestone, R&D cost sharing, royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development and commercialization. Upfront payments associated with collaborative arrangements and subsequent payments made to the partner for the achievement of development milestones prior to regulatory approval are expensed to acquired IPR&D and milestones expense in the consolidated statements of earnings. Regulatory and commercial milestone payments made to the partner subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of products sold over the estimated useful life of the related asset. Royalties are expensed to cost of products sold in the consolidated statements of earnings when incurred. Advertising Costs associated with advertising are expensed as incurred and are included in selling, general and administrative (SG&A) expense in the consolidated statements of earnings. Advertising expenses were $ 2.1 billion in 2025, $ 2.1 billion in 2024 and $ 2.2 billion in 2023. Pension and Other Post-Employment Benefits AbbVie records annual expenses relating to its defined benefit pension and other post-employment benefit plans based on calculations which utilize various actuarial assumptions including discount rates, rates of return on assets, compensation increases, turnover rates and health care cost trend rates. AbbVie reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. Actuarial gains and losses are deferred in 2025 Form 10-K | 58 accumulated other comprehensive income (loss) (AOCI), net of tax and are amortized over the remaining service attribution periods of the employees under the corridor method. Differences between the expected long-term return on plan assets and the actual annual return are generally amortized to net periodic benefit cost over a five-year period. Income Taxes Income taxes are accounted for under the asset and liability method. Provisions for federal, state and foreign income taxes are calculated on reported pre-tax earnings based on current tax laws. Deferred taxes are provided using enacted tax rates on the future tax consequences of temporary differences, which are the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and the tax benefits of carryforwards. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. Cash and Equivalents Cash and equivalents include money market funds and time deposits with original maturities of three months or less. Investments Investments consist primarily of equity securities, held-to-maturity debt securities, marketable debt securities and time deposits. Investments in equity securities that have readily determinable fair values are recorded at fair value. Investments in equity securities that do not have readily determinable fair values are recorded at cost and are remeasured to fair value based on certain observable price changes or impairment events as they occur. Held-to-maturity debt securities are recorded at cost. Gains or losses on investments are included in other expense, net in the consolidated statements of earnings. Investments in marketable debt securities are classified as available-for-sale and are recorded at fair value with any unrealized holding gains or losses, net of tax, included in AOCI on the consolidated balance sheets until realized, at which time the gains or losses are recognized in earnings. AbbVie periodically assesses its marketable debt securities for impairment and credit losses. When a decline in the fair value of marketable debt security is due to credit related factors, an allowance for credit losses is recorded with a corresponding charge to other expense, net in the consolidated statements of earnings. When AbbVie determines that a non-credit related impairment has occurred, the amortized cost basis of the investment, net of allowance for credit losses, is written down with a charge to other expense, net in the consolidated statements of earnings and an available-for-sale investment's unrealized loss is reclassified from AOCI to other expense, net in the consolidated statements of earnings. Realized gains and losses on sales of investments are computed using the first-in, first-out method adjusted for any impairments and credit losses that were recorded in net earnings. Accounts Receivable Accounts receivable are stated at amortized cost less allowance for credit losses. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances for known troubled accounts, other currently available information including customer financial condition and both current and forecasted economic conditions. Inventories Inventories are valued at the lower of cost (first-in, first-out basis) or market. Cost includes material and conversion costs. Inventories consisted of the following: as of December 31 (in millions) 2025 2024 Finished goods $ 1,580 $ 1,173 Work-in-process 2,287 1,951 Raw materials 1,084 1,057 Inventories $ 4,951 $ 4,181 59 | 2025 Form 10-K Property and Equipment, Net as of December 31 (in millions) 2025 2024 Land $ 287 $ 284 Buildings 3,057 2,895 Equipment 8,785 7,995 Construction in progress 1,401 1,093 Property and equipment, gross 13,530 12,267 Less accumulated depreciation ( 7,902 ) ( 7,133 ) Property and equipment, net $ 5,628 $ 5,134 Depreciation for property and equipment is recorded on a straight-line basis over the estimated useful lives of the assets ( 10 to 50 years for buildings and 2 to 25 years for equipment). Depreciation expense was $ 762 million in 2025, $ 764 million in 2024 and $ 752 million in 2023. Leases Short-term leases with a term of 12 months or less are not recorded on the balance sheet. For leases commencing or modified in 2019 or later, AbbVie does not separate lease components from non-lease components. The company records lease liabilities based on the present value of lease payments over the lease term. AbbVie generally uses an incremental borrowing rate to discount its lease liabilities, as the rate implicit in the lease is typically not readily determinable. Certain lease agreements include renewal options that are under the company's control. AbbVie includes optional renewal periods in the lease term only when it is reasonably certain that AbbVie will exercise its option. Variable lease payments include payments to lessors for taxes, maintenance, insurance and other operating costs as well as payments that are adjusted based on an index or rate. The company's lease agreements do not contain any significant residual value guarantees or restrictive covenants. Litigation and Contingencies Loss contingency provisions are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. When a best estimate cannot be made, the minimum loss contingency amount in a probable range is recorded. Legal fees are expensed as incurred. AbbVie accrues for product liability claims on an undiscounted basis. The liabilities are evaluated quarterly and adjusted if necessary as additional information becomes available. Receivables for insurance recoveries for product liability claims, if any, are recorded as assets on an undiscounted basis when it is probable that a recovery will be realized. Goodwill and Intangible Assets Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital and terminal values of market participants. Definite-lived intangibles are amortized over their estimated useful lives using the estimated pattern of economic benefit. AbbVie reviews the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. AbbVie first compares the projected undiscounted cash flows to be generated by the asset to its carrying value. If the undiscounted cash flows of an intangible asset are less than the carrying value, the intangible asset is written down to its fair value. Where cash flows cannot be identified for an individual asset, the review is applied at the lowest level for which cash flows are largely independent of the cash flows of other assets and liabilities. Goodwill and indefinite-lived assets are not amortized but are subject to an impairment review annually and more frequently when indicators of impairment exist. An impairment of goodwill could occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. An impairment of indefinite-lived intangible assets would occur if the fair value of the intangible asset is less than the carrying value. The company tests its goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If the company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed. AbbVie tests indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. If the company concludes it is more likely than not that the fair 2025 Form 10-K | 60 value is less than its carrying amount, a quantitative impairment test is performed. For its quantitative impairment tests, the company uses an estimated future cash flow approach that requires significant judgment with respect to future volume, revenue and expense growth rates, changes in working capital use, the selection of an appropriate discount rate, asset groupings and other assumptions and estimates. The estimates and assumptions used are consistent with the company's business plans and a market participant's views. The use of alternative estimates and assumptions could increase or decrease projected cash flows and the estimated fair value of the related intangible assets. Future changes to these estimates and assumptions could have a material impact on the company's results of operations. Actual results may differ from the company's estimates. Foreign Currency Translation Foreign subsidiary earnings are translated into U.S. dollars using average exchange rates. The net assets of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recognized in other comprehensive income (loss) in the consolidated statements of comprehensive income. The net assets of subsidiaries in highly inflationary economies are remeasured as if the functional currency were the reporting currency. The remeasurement is recognized in net foreign exchange loss in the consolidated statements of earnings. Derivatives All derivative instruments are recognized as either assets or liabilities at fair value on the consolidated balance sheets and are classified as current or long-term based on the scheduled maturity of the instrument. For derivatives formally designated as hedges, the company assesses at inception and quarterly thereafter whether the hedging derivatives are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The changes in fair value of a derivative designated as a fair value hedge and of the hedged item attributable to the hedged risk are recognized in earnings immediately. The effective portions of changes in the fair value of a derivative designated as a cash flow hedge are reported in AOCI and are subsequently recognized in earnings consistent with the underlying hedged item. If it is determined that a derivative is no longer highly effective as a hedge, the company discontinues hedge accounting prospectively. If a hedged forecasted transaction becomes probable of not occurring, any gains or losses are reclassified from AOCI to earnings. Derivatives that are not designated as hedges are adjusted to fair value through current earnings. The company also uses derivative instruments or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. Realized and unrealized gains and losses from these hedges are included in AOCI. Derivative cash flows, with the exception of net investment hedges, are principally classified in the operating section of the consolidated statements of cash flows, consistent with the underlying hedged item. Cash flows related to net investment hedges are classified in the investing section of the consolidated statements of cash flows. Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted ASU No. 2024-03 In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40 ). The standard requires further disaggregation of relevant expense captions in a separate note to the financial statements. The standard is effective for AbbVie starting in annual periods in 2027 and interim periods beginning in 2028, with early adoption permitted. AbbVie is currently assessing the impact of adopting this guidance on its consolidated financial statements. Recently Adopted Accounting Pronouncements ASU No. 2023-09 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) . The standard requires disaggregation of the effective tax rate reconciliation into standard categories, enhances disclosure of income taxes paid, and modifies other income tax-related disclosures. AbbVie adopted the standard in the fourth quarter of 2025 on a prospective basis. The adoption did not have a material impact on its consolidated financial statements. See Note 14 for additional information. 61 | 2025 Form 10-K Note 3 Supplemental Financial Information Interest Expense, Net years ended December 31 (in millions) 2025 2024 2023 Interest expense $ 2,893 $ 2,808 $ 2,224 Interest income ( 266 ) ( 648 ) ( 540 ) Interest expense, net $ 2,627 $ 2,160 $ 1,684 Accounts Payable and Accrued Liabilities as of December 31 (in millions) 2025 2024 Sales rebates $ 14,572 $ 14,304 Accounts payable 3,592 2,945 Current portion of contingent consideration liabilities 3,455 2,589 Dividends payable 3,099 2,936 Salaries, wages and commissions 2,219 1,986 Royalty and license arrangements 453 527 Other 7,344 6,658 Accounts payable and accrued liabilities $ 34,734 $ 31,945 Other Long-Term Liabilities as of December 31 (in millions) 2025 2024 Contingent consideration liabilities $ 21,919 $ 19,077 Liabilities for unrecognized tax benefits 5,573 5,049 Pension and other post-employment benefits 1,410 1,234 Income taxes payable 364 1,261 Other 3,303 3,508 Other long-term liabilities $ 32,569 $ 30,129 2025 Form 10-K | 62 Note 4 Earnings Per Share AbbVie grants certain restricted stock units (RSUs) that are considered to be participating securities. Due to the presence of participating securities, AbbVie calculates earnings per share (EPS) using the more dilutive of the treasury stock or the two-class method. For all periods presented, the two-class method was more dilutive. The following table summarizes the impact of the two-class method: Years ended December 31, (in millions, except per share data) 2025 2024 2023 Basic EPS Net earnings attributable to AbbVie Inc. $ 4,226 $ 4,278 $ 4,863 Earnings allocated to participating securities 40 40 43 Earnings available to common shareholders $ 4,186 $ 4,238 $ 4,820 Weighted average basic shares of common stock outstanding 1,769 1,769 1,768 Basic earnings per share attributable to AbbVie Inc. $ 2.37 $ 2.40 $ 2.73 Diluted EPS Net earnings attributable to AbbVie Inc. $ 4,226 $ 4,278 $ 4,863 Earnings allocated to participating securities 40 40 43 Earnings available to common shareholders $ 4,186 $ 4,238 $ 4,820 Weighted average shares of common stock outstanding 1,769 1,769 1,768 Effect of dilutive securities 4 4 5 Weighted average diluted shares of common stock outstanding 1,773 1,773 1,773 Diluted earnings per share attributable to AbbVie Inc. $ 2.36 $ 2.39 $ 2.72 Certain shares issuable under stock-based compensation plans were excluded from the computation of EPS because the effect would have been antidilutive. The number of common shares excluded was insignificant for all periods presented. Note 5 Licensing, Acquisitions and Other Arrangements Acquisition of Nimble Therapeutics, Inc. On January 23, 2025, AbbVie completed its acquisition of Nimble Therapeutics, Inc. (Nimble). Nimble is a biotechnology company dedicated to delivering on the promise of oral peptide therapeutics and its lead asset, an investigational oral peptide IL23R inhibitor in development for the treatment of psoriasis. The aggregate purchase price of $ 288 million was comprised of a $ 210 million upfront cash payment and $ 78 million for the acquisition date fair value of contingent consideration liabilities, for which AbbVie may owe up to $ 130 million in future payments upon achievement of certain development milestones. The transaction was 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. As of the acquisition date, AbbVie acquired $ 118 million of intangible assets and the acquisition resulted in the recognition of $ 170 million of goodwill. 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, including expected synergies related to enhancement of AbbVie’s existing immunology discovery capabilities and development efforts. The goodwill is not deductible for tax purposes. Other assets acquired and liabilities assumed were insignificant. Acquisition of Cerevel Therapeutics Holdings, Inc. On August 1, 2024, AbbVie completed its acquisition of Cerevel Therapeutics Holdings, Inc. (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 included multiple clinical-stage and preclinical candidates with the potential to treat several diseases including schizophrenia, Parkinson's disease and mood disorders. Under the terms of the agreement, AbbVie acquired all outstanding shares of Cerevel Therapeutics for $ 45.00 per 63 | 2025 Form 10-K 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 was 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 was finalized during the three months ended March 31, 2025. The following table summarizes the final 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. 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 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 December 31, 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 10 and Note 11 for additional information. 2025 Form 10-K | 64 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 consolidated financial statements. For the period from the acquisition date through December 31, 2024, operating losses attributable to Cerevel Therapeutics were $ 4.9 billion, inclusive of an intangible asset impairment charge of $ 4.5 billion related to emraclidine. See Note 7 for additional information. Operating losses attributable to Cerevel Therapeutics also included $ 161 million of cash-settled, post-closing expense for Cerevel Therapeutics employee incentive awards. AbbVie 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 year ended December 31, 2024 and were included in SG&A expense in the consolidated statements of earnings. Acquisition of ImmunoGen, Inc. On February 12, 2024, AbbVie completed its acquisition of ImmunoGen, Inc. (ImmunoGen). ImmunoGen is a commercial-stage biotechnology company focused on the discovery, development and commercialization of antibody-drug conjugates (ADC) for cancer patients. ImmunoGen's oncology portfolio includes its flagship cancer therapy Elahere, a first-in-class ADC approved for platinum-resistant ovarian cancer, and a pipeline of promising next-generation ADC's targeting hematologic malignancies and solid tumors. The combination accelerated AbbVie’s entry into the solid tumor space and strengthened its oncology pipeline. Under the terms of the agreement, AbbVie acquired all outstanding shares of ImmunoGen for $ 31.26 per share in cash. The total fair value of the consideration transferred to owners of ImmunoGen common stock was $ 9.8 billion ($ 9.2 billion, net of cash acquired). The acquisition of ImmunoGen was 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 was finalized during the three months ended December 31, 2024. 65 | 2025 Form 10-K The following table summarizes the final fair value of assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash and equivalents $ 591 Accounts receivable 171 Inventories 211 Prepaid expenses and other current assets 40 Property and equipment, net 7 Intangible assets, net Developed product rights 7,200 License agreements 125 Acquired in-process research and development 1,280 Other noncurrent assets 273 Current portion of long-term debt ( 99 ) Accounts payable and accrued liabilities ( 312 ) Deferred income taxes ( 899 ) Other long-term liabilities ( 47 ) Total identifiable net assets 8,541 Goodwill 1,249 Total assets acquired and liabilities assumed $ 9,790 The fair value step-up adjustment to inventories of $ 179 million was amortized to cost of products sold when the inventory was sold to customers during the year ended December 31, 2024. 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. 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. Other noncurrent assets primarily consist of $ 250 million of deferred tax assets. The current portion of long-term debt assumed by AbbVie was repaid concurrent with the acquisition at the fair value of $ 99 million. See Note 10 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 ImmunoGen represents expected synergies including, the ability to: (i) expand AbbVie’s product portfolio as well as the potential to increase revenue from future growth platforms, (ii) accelerate AbbVie’s clinical and commercial presence in the solid tumor space within oncology, (iii) leverage the respective strengths of each company, and (iv) enhance AbbVie’s existing ADC development efforts. The goodwill is not deductible for tax purposes. Following the acquisition date, the operating results of ImmunoGen have been included in the consolidated financial statements. For the period from the acquisition date through December 31, 2024, net revenues attributable to ImmunoGen were $ 578 million and operating losses attributable to ImmunoGen were $ 682 million, inclusive of $ 349 million of cash-settled, post-closing expense for ImmunoGen employee incentive awards, $ 179 million of inventory fair value step-up amortization and $ 157 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. 2025 Form 10-K | 66 Acquisition-related expenses, which were comprised primarily of regulatory, financial advisory and legal fees, totaled $ 59 million for the year ended December 31, 2024 and were included in SG&A expense in the consolidated statements of earnings. Pro Forma Financial Information The following table presents the unaudited pro forma combined results of AbbVie, ImmunoGen and Cerevel Therapeutics for 2024 and 2023 as if the acquisitions of ImmunoGen and Cerevel Therapeutics had occurred on January 1, 2023: years ended December 31 (in millions) 2024 2023 Net revenues $ 56,389 $ 54,691 Net earnings 4,564 2,862 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 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 year ended December 31, 2024 to the year ended December 31, 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. 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 acquisitions. Other Licensing & Acquisitions Activity Cash outflows related to other acquisitions and investments, net of cash acquired totaled $ 5.2 billion in 2025, $ 3.0 billion in 2024 and $ 1.2 billion in 2023. The following table summarizes acquired IPR&D and milestone expense: years ended December 31 (in millions) 2025 2024 2023 Upfront charges $ 4,808 $ 2,627 $ 582 Development milestones 208 130 196 Acquired IPR&D and milestones $ 5,016 $ 2,757 $ 778 RemeGen Co., Ltd. Subsequent to December 31, 2025, AbbVie announced that it entered into a license agreement with RemeGen Co., Ltd. (RemeGen). Under the terms of the agreement, AbbVie will make an upfront payment of $ 650 million and receive an exclusive global license excluding China to develop, manufacture and commercialize RC148, a novel investigational Programmed Cell Death-1 (PD-1)/Vascular Endothelial Growth Factor (VEGF)-targeted bispecific antibody in development for the treatment of multiple advanced solid tumors. AbbVie could make additional payments of up to $ 5.0 billion upon achievement of certain development, regulatory and commercial milestones and pay tiered royalties. The transaction is expected to close in 2026, subject to regulatory approvals and other customary closing conditions. Gilgamesh Pharmaceuticals, Inc. In October 2025, AbbVie completed its previously announced acquisition of Gilgamesh Pharmaceuticals, Inc. (Gilgamesh), including its lead program bretisilocin (GM-2505). GM-2505, renamed ABBV-2505, is a short-acting serotonin (5-HT)2A receptor agonist and 5-HT releaser in development for the treatment of major depressive disorder. As part of the transaction, Gilgamesh spun off a new independent entity that will operate under the name Gilgamesh Pharma Inc. to retain its employees and other programs, including an existing option-to-license agreement with AbbVie which remains in effect. Under the terms of the agreement, AbbVie made an upfront cash payment of $ 906 million to acquire all outstanding equity of Gilgamesh and the transaction was accounted for as an asset acquisition as the lead program represented substantially all of the fair value of the gross assets acquired. The upfront cash payment was recorded in acquired IPR&D and milestones expense in the consolidated statement of earnings in the fourth quarter of 2025. AbbVie could make additional payments of up to $ 300 million upon achievement of development milestones. 67 | 2025 Form 10-K Ichnos Glenmark Innovation, Inc. In September 2025, AbbVie entered into a license agreement with Ichnos Glenmark Innovation, Inc. (IGI). Under the terms of the agreement, AbbVie received an exclusive license to develop, manufacture and commercialize ISB-2001 (ABBV-2001), a tri-specific T-cell engager in development for the treatment of multiple myeloma across North America, Europe, Japan and Greater China. The upfront payment of $ 700 million was recorded in acquired IPR&D and milestones expense in the consolidated statement of earnings in the third quarter of 2025. AbbVie could make additional payments of up to $ 1.2 billion upon achievement of certain development, regulatory and commercial milestones and pay tiered royalties. Capstan Therapeutics, Inc. In August 2025, AbbVie acquired Capstan Therapeutics, Inc. (Capstan), including its lead program CPTX2309 (ABBV-619), a potential first-in-class in vivo targeted lipid nanoparticle (tLNP) anti-CD19 CAR-T therapy candidate in development for the treatment of B cell-mediated autoimmune diseases. Under the terms of the agreement, AbbVie paid cash consideration of $ 2.1 billion ($ 1.9 billion, net of cash acquired) to acquire all outstanding equity of Capstan and the transaction was accounted for as an asset acquisition as the lead program represented substantially all of the fair value of the gross assets acquired. The cash consideration of $ 1.9 billion, net of cash acquired, was recognized in acquired IPR&D and milestones expense in the consolidated statement of earnings in the third quarter of 2025. In connection with the transaction, AbbVie also recorded $ 187 million of cash-settled, post-closing expense for Capstan employee incentive and compensation awards in the consolidated statement of earnings in the third quarter of 2025. ADARx Pharmaceuticals, Inc. In May 2025, AbbVie entered into a license option agreement with ADARx Pharmaceuticals, Inc. (ADARx). Under the terms of the agreement, AbbVie received exclusive options to global license rights to develop and commercialize ADARx’s small interfering RNA (siRNA) therapeutics across multiple disease areas, including neuroscience, immunology and oncology. Under the terms of the agreement, AbbVie made an upfront payment of $ 335 million which was recognized in acquired IPR&D and milestones expense in the consolidated statement of earnings in the second quarter of 2025. AbbVie could make additional payments of up to $ 385 million for option fees and option exercise payments, up to $ 7.5 billion upon achievement of certain development, regulatory and commercial milestones and pay tiered royalties. Gubra A/S In April 2025, AbbVie entered into a licensing agreement with Gubra A/S. Under the terms of the agreement, AbbVie received an exclusive global license to develop and commercialize GUB014295 (ABBV-295), a long-acting amylin analog in development for the treatment of obesity. Under the terms of the agreement, AbbVie made an upfront payment of $ 350 million which was recognized in acquired IPR&D and milestones expense in the consolidated statement of earnings in the second quarter of 2025. AbbVie could make additional payments of up to $ 1.9 billion upon achievement of certain development, regulatory and commercial milestones and pay tiered royalties. Aliada Therapeutics Holdings, Inc. In December 2024, AbbVie acquired Aliada Therapeutics Holdings, Inc. (Aliada) including its lead program ALIA-1758 (ABBV-1758) and accounted for the transaction as an asset acquisition as the lead program represented substantially all of the fair value of the gross assets acquired. ABBV-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 made an upfront cash payment of approximately $ 1.4 billion to acquire all outstanding equity of Aliada which was recorded in acquired IPR&D and milestones expense in the consolidated statement of earnings in the fourth quarter of 2024. Celsius Therapeutics, Inc. In June 2024, AbbVie acquired Celsius Therapeutics, Inc. (Celsius Therapeutics) including its lead pipeline asset CEL383 (ABBV-8736). Celsius Therapeutics is a clinical-stage biotechnology company focused on the discovery and development of precision medicine in inflammatory bowel disease. The transaction was accounted for as an asset acquisition as the lead pipeline asset represented substantially all of the fair value of the gross assets acquired. The upfront payment of $ 250 million was recorded in acquired IPR&D and milestones expense in the consolidated statement of earnings in the second quarter of 2024. Other Arrangements In addition to the significant arrangements described above, AbbVie entered into several other arrangements resulting in charges related to upfront payments of $ 602 million in 2025, $ 975 million in 2024 and $ 582 million in 2023. In connection 2025 Form 10-K | 68 with the other individually insignificant early-stage arrangements entered into in 2025, AbbVie could make additional payments of up to $ 6.9 billion upon the achievement of certain development, regulatory and commercial milestones. Note 6 Collaborations The company has ongoing transactions with other entities through collaboration agreements. The following represent the significant collaboration agreements impacting 2025, 2024 and 2023. Collaboration with Janssen Biotech, Inc. In December 2011, Pharmacyclics, a wholly-owned subsidiary of AbbVie, entered into a worldwide collaboration and license agreement with Janssen, one of the Janssen Pharmaceutical companies of Johnson & Johnson, for the joint development and commercialization of Imbruvica, a novel, orally active, selective covalent inhibitor of Bruton's tyrosine kinase and certain compounds structurally related to Imbruvica, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States. The collaboration provides Janssen with an exclusive license to commercialize Imbruvica outside of the United States and co-exclusively with AbbVie in the United States. Both parties are responsible for the development, manufacturing and marketing of any products generated as a result of the collaboration. The collaboration has no set duration or specific expiration date and provides for potential future development, regulatory and approval milestone payments of up to $ 200 million to AbbVie. The collaboration also includes a cost sharing arrangement for associated collaboration activities. Except in certain cases, Janssen is responsible for approximately 60 % of collaboration development costs and AbbVie is responsible for the remaining 40 % of collaboration development costs. In the United States, both parties have co-exclusive rights to commercialize the products; however, AbbVie is the principal in the end-customer product sales. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. Sales of Imbruvica are included in AbbVie's net revenues. Janssen's share of profits is included in AbbVie's cost of products sold. Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share. Outside the United States, Janssen is responsible for and has exclusive rights to commercialize Imbruvica. AbbVie and Janssen share pre-tax profits and losses equally from the commercialization of products. AbbVie's share of profits is included in AbbVie's net revenues. Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share. The following table shows the profit and cost sharing relationship between Janssen and AbbVie: years ended December 31 (in millions) 2025 2024 2023 United States - Janssen's share of profits (included in cost of products sold) $ 954 $ 1,140 $ 1,245 International - AbbVie's share of profits (included in net revenues) 821 899 931 Global - AbbVie's share of other costs (included in respective line items) 101 162 228 AbbVie’s receivable from Janssen, included in accounts receivable, net, was $ 218 million at December 31, 2025 and $ 237 million at December 31, 2024. AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was $ 189 million at December 31, 2025 and $ 282 million at December 31, 2024. Collaboration with Genentech, Inc. AbbVie and Genentech, a member of the Roche Group, are parties to a collaboration and license agreement executed in 2007 to jointly research, develop and commercialize human therapeutic products containing BCL-2 inhibitors and certain other compound inhibitors which included Venclexta, a BCL-2 inhibitor used to treat certain hematological malignancies. AbbVie shares equally with Genentech all pre-tax profits and losses from the development and commercialization of Venclexta in the United States. AbbVie pays royalties on Venclexta net revenues outside the United States. AbbVie manufactures and distributes Venclexta globally and is the principal in the end-customer product sales. Sales of Venclexta are included in AbbVie's net revenues. Genentech's share of United States profits is included in AbbVie's cost of products sold. AbbVie records sales and marketing costs associated with the United States collaboration as part of SG&A expenses and global development costs as part of R&D expenses, net of Genentech’s share. Royalties paid for Venclexta revenues outside the United States are also included in AbbVie’s cost of products sold. 69 | 2025 Form 10-K The following table shows the profit and cost sharing relationship between Genentech and AbbVie: years ended December 31 (in millions) 2025 2024 2023 Genentech's share of profits, including royalties (included in cost of products sold) $ 1,064 $ 990 $ 869 AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A) 28 29 41 AbbVie's share of development costs (included in R&D) 63 84 109 Note 7 Goodwill and Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of goodwill: (in millions) Balance as of December 31, 2023 $ 32,293 Additions (a) 2,951 Foreign currency translation adjustments and other ( 288 ) Balance as of December 31, 2024 34,956 Additions (b) 170 Foreign currency translation adjustments and other 514 Balance as of December 31, 2025 $ 35,640 (a) Goodwill additions related to the acquisitions of ImmunoGen and Cerevel Therapeutics (see Note 5). (b) Goodwill additions related to the acquisition of Nimble (see Note 5). The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist. As of December 31, 2025 and 2024, there were no accumulated goodwill impairment losses. 2025 Form 10-K | 70 Intangible Assets, Net The following table summarizes intangible assets: 2025 2024 as of December 31 (in millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Definite-lived intangible assets Developed product rights $ 81,239 $ ( 34,849 ) $ 46,390 $ 81,428 $ ( 28,253 ) $ 53,175 License agreements 8,353 ( 7,383 ) 970 8,315 ( 6,624 ) 1,691 Total definite-lived intangible assets 89,592 ( 42,232 ) 47,360 89,743 ( 34,877 ) 54,866 Indefinite-lived intangible assets 5,281 — 5,281 5,202 — 5,202 Total intangible assets, net $ 94,873 $ ( 42,232 ) $ 52,641 $ 94,945 $ ( 34,877 ) $ 60,068 Definite-Lived Intangible Assets In the third quarter of 2025, the company made a decision to discontinue development and commercialization of Resonic, a rapid acoustic pulse device for long-term improvement in the appearance of cellulite. The company also made a decision to reduce current sales and marketing investment related to Durysta, an on-market eye care product to treat elevated intraocular pressure in open-angle glaucoma and ocular hypertension. Each of these strategic decisions contributed to decreases in the estimated future cash flows for the respective products and represented triggering events that required an evaluation of the underlying definite-lived intangible assets for impairment. For Resonic, the evaluation resulted in a full impairment of both the gross and net carrying amount of $ 407 million. For Durysta, the company utilized a discounted cash flow analysis to estimate the fair value of $ 271 million, which was lower than the carrying value of $ 711 million and resulted in a partial impairment of both the gross and net carrying amount. Based on the revised cash flows, the company recorded pre-tax impairment charges of $ 847 million in cost of products sold in the consolidated statement of earnings for the third quarter of 2025. In the fourth quarter of 2023, the company made a decision to reduce current sales and marketing investment related to both CoolSculpting, a body contouring technology for aesthetic nonsurgical fat reduction, and Liletta, an on-market women’s health product. Each of these strategic decisions contributed to significant decreases in the estimated future cash flows for the respective products and represented triggering events that required an evaluation of the underlying definite-lived intangible assets for impairment. The company used a discounted cash flow analysis for both products. For CoolSculpting, the fair value of $ 290 million was lower than the carrying value of $ 1.3 billion resulting in a partial impairment of both the gross and net carrying amount. For Liletta, the fair value of $ 241 million was lower than the carrying value of $ 561 million resulting in a partial impairment of both the gross and net carrying amount. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $ 1.4 billion to costs of products sold in the consolidated statement of earnings for the fourth quarter of 2023. In the third quarter of 2023, as part of the Inflation Reduction Act of 2022, the company’s oncology product Imbruvica sold in the U.S. was included on the list of products subject to government-set prices by CMS. 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 consolidated statement of earnings for the third quarter of 2023. Fair value measurements for the above evaluations were based on Level 3 inputs including estimated net revenues, cost of products sold, R&D costs, selling and marketing costs and discount rate. 71 | 2025 Form 10-K Definite-lived intangible assets are amortized over their estimated useful lives, which range between 1 to 19 years with an average of 12 years for developed product rights and 11 years for license agreements. Amortization expense was $ 7.4 billion in 2025, $ 7.6 billion in 2024 and $ 7.9 billion in 2023 and was included in cost of products sold in the consolidated statements of earnings. The anticipated annual amortization expense for definite-lived intangible assets recorded as of December 31, 2025 is as follows: (in billions) 2026 2027 2028 2029 2030 Anticipated annual amortization expense $ 6.7 $ 6.1 $ 6.2 $ 5.7 $ 4.5 Indefinite-Lived Intangible Assets Indefinite-lived intangible assets represent acquired IPR&D associated with products that have not yet received regulatory approval. The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist. During the fourth quarter of 2024, the company announced that its two Phase 2 EMPOWER trials investigating emraclidine as a once-daily, oral monotherapy treatment for adults with schizophrenia who are experiencing an acute exacerbation of psychotic symptoms, did not meet their primary endpoint of showing a statistically significant reduction (improvement) in the change from baseline in the Positive and Negative Syndrome Scale total score compared to the placebo group at week 6. The results of these trials represented a triggering event which required the company to evaluate the underlying indefinite-lived intangible asset for impairment which resulted in a significant decrease in the estimated future cash flows for the product. The company utilized a discounted cash flow analysis to determine the fair value of $ 2.4 billion, which was lower than the carrying value of $ 6.9 billion and resulted in a partial impairment of the intangible asset carrying amount as of November 11, 2024. 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 rates. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $ 4.5 billion to research and development expense in the consolidated statement of earnings for the fourth quarter of 2024. 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. This decision contributed to a delay in the estimated timing of regulatory approval as well as a significant decrease in estimated future cash flows of the product and represented a triggering event which required the company to evaluate the underlying indefinite-lived intangible asset for impairment. The company utilized a discounted cash flow analysis to estimate the fair value which was below the carrying value of the intangible asset. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $ 630 million to research and development expense in the consolidated statement of earnings for the first quarter of 2023. Note 8 Restructuring Plans AbbVie continuously evaluates its operations to identify opportunities to optimize its manufacturing and R&D operations, commercial infrastructure and administrative costs and to respond to changes in its business environment. As a result, AbbVie management periodically approves individual restructuring plans to achieve these objectives. In 2025, 2024 and 2023, no such plans were individually significant. Restructuring charges recorded were $ 282 million in 2025, $ 189 million in 2024 and $ 132 million in 2023 and were primarily related to employee severance and contractual obligations. These charges were recorded in cost of products sold, R&D expense and SG&A expense in the consolidated statements of earnings based on the classification of the affected employees or the related operations. 2025 Form 10-K | 72 The following table summarizes the cash activity in the restructuring reserve for 2025, 2024 and 2023: (in millions) Accrued balance as of December 31, 2022 $ 176 Charges 107 Payments and other adjustments ( 87 ) Accrued balance as of December 31, 2023 196 Charges 168 Payments and other adjustments ( 128 ) Accrued balance as of December 31, 2024 236 Charges 166 Payments and other adjustments ( 88 ) Accrued balance as of December 31, 2025 $ 314 Allergan Integration Plan Following the closing of the Allergan acquisition, AbbVie implemented an integration plan designed to reduce costs, integrate and optimize the combined organization and incurred total cumulative charges of $ 2.5 billion through 2023. 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 expenses. The Allergan integration plan was substantially complete as of December 31, 2023 and the remaining accrual as of December 31, 2025 is insignificant. The following table summarizes the charges associated with the Allergan acquisition integration plan: year ended December 31 (in millions) 2023 Cost of products sold $ 89 Research and development 7 Selling, general and administrative 192 Total charges $ 288 Note 9 Leases AbbVie's lease portfolio primarily consists of real estate properties, vehicles and equipment. The following table summarizes the amounts and location of operating and finance leases on the consolidated balance sheets: as of December 31 (in millions) Balance sheet caption 2025 2024 Assets Operating Other assets $ 737 $ 723 Finance Property and equipment, net 44 33 Total lease assets $ 781 $ 756 Liabilities Operating Current Accounts payable and accrued liabilities $ 194 $ 178 Noncurrent Other long-term liabilities 689 697 Finance Current Current portion of long-term debt and finance lease obligations 19 17 Noncurrent Long-term debt and finance lease obligations 22 23 Total lease liabilities $ 924 $ 915 73 | 2025 Form 10-K The following table summarizes the lease costs recognized in the consolidated statements of earnings: years ended December 31 (in millions) 2025 2024 2023 Operating lease cost $ 213 $ 196 $ 189 Short-term lease cost 75 65 28 Variable lease cost 104 86 88 Total lease cost $ 392 $ 347 $ 305 Sublease income and finance lease costs were insignificant in 2025, 2024 and 2023. The following table presents the weighted-average remaining lease term and weighted-average discount rate for operating and finance leases: years ended December 31 2025 2024 2023 Weighted-average remaining lease term (years) Operating 6 7 7 Finance 4 5 3 Weighted-average discount rate Operating 3.5 % 3.3 % 3.0 % Finance 4.3 % 4.2 % 3.6 % The following table presents supplementary cash flow information regarding the company's leases: years ended December 31 (in millions) 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 230 $ 204 $ 214 Right-of-use assets obtained in exchange for new operating lease liabilities 212 159 173 Finance lease cash flows were insignificant in 2025, 2024 and 2023. The following table summarizes the future maturities of AbbVie's operating and finance lease liabilities as of December 31, 2025: (in millions) Operating leases Finance leases Total (a) 2026 $ 224 $ 21 $ 245 2027 187 11 198 2028 157 7 164 2029 133 3 136 2030 100 — 100 Thereafter 184 2 186 Total lease payments 985 44 1,029 Less: Interest 102 3 105 Present value of lease liabilities $ 883 $ 41 $ 924 (a) Lease payments recognized as part of lease liabilities for optional renewal periods are insignificant. 2025 Form 10-K | 74 Note 10 Debt, Credit Facilities and Commitments and Contingencies The following table summarizes long-term debt: as of December 31 (dollars in millions) 2025 Effective interest rate (a) 2025 2024 Effective interest rate (a) 2024 3.60 - 3.80 % aggregate notes due 2025 2.09 - 3.66 % $ — 2.09 - 3.66 % $ 6,771 2.95 % senior notes due 2026 3.02 % 4,000 3.02 % 4,000 3.20 % senior notes due 2026 3.28 % 2,000 3.28 % 2,000 4.549 % term loan due 2027 4.61 % 2,000 4.61 % 2,000 0.75 % senior euro notes due 2027 (€ 750 principal) 0.86 % 880 0.86 % 778 4.80 % senior notes due 2027 4.93 % 2,250 4.93 % 2,250 4.25 % senior notes due 2028 4.38 % 1,750 4.38 % 1,750 4.65 % senior notes due 2028 4.78 % 1,250 — — 2.125 % senior euro notes due 2028 (€ 750 principal) 2.18 % 880 2.18 % 778 2.625 % senior euro notes due 2028 (€ 500 principal) 1.20 % 586 1.20 % 519 3.20 % senior notes due 2029 3.25 % 5,500 3.25 % 5,500 2.125 % senior euro notes due 2029 (€ 550 principal) 1.19 % 645 1.19 % 570 4.80 % senior notes due 2029 4.91 % 2,500 4.91 % 2,500 4.875 % senior notes due 2030 4.96 % 1,000 — — 1.25 % senior euro notes due 2031 (€ 650 principal) 1.30 % 761 1.30 % 674 4.95 % senior notes due 2031 5.02 % 2,000 5.02 % 2,000 5.05 % senior notes due 2034 5.13 % 3,000 5.13 % 3,000 4.55 % senior notes due 2035 3.52 % 1,789 3.52 % 1,789 4.50 % senior notes due 2035 4.58 % 2,500 4.58 % 2,500 5.20 % senior notes due 2035 5.26 % 1,000 — — 4.30 % senior notes due 2036 4.37 % 1,000 4.37 % 1,000 4.05 % senior notes due 2039 4.11 % 4,000 4.11 % 4,000 4.40 % senior notes due 2042 4.46 % 2,600 4.46 % 2,600 4.625 % senior notes due 2042 4.00 % 457 4.00 % 457 4.85 % senior notes due 2044 4.11 % 1,074 4.11 % 1,074 5.35 % senior notes due 2044 5.39 % 750 5.39 % 750 4.70 % senior notes due 2045 4.73 % 2,700 4.73 % 2,700 4.75 % senior notes due 2045 4.20 % 881 4.20 % 881 4.45 % senior notes due 2046 4.50 % 2,000 4.50 % 2,000 4.875 % senior notes due 2048 4.94 % 1,750 4.94 % 1,750 4.25 % senior notes due 2049 4.29 % 5,750 4.29 % 5,750 5.40 % senior notes due 2054 5.44 % 3,000 5.44 % 3,000 5.60 % senior notes due 2055 5.64 % 750 — — 5.50 % senior notes due 2064 5.53 % 1,500 5.53 % 1,500 Fair value hedges ( 47 ) ( 224 ) Unamortized bond discounts ( 122 ) ( 130 ) Unamortized deferred financing costs ( 259 ) ( 266 ) Unamortized bond premiums 503 555 Financing liability 378 328 Other 41 40 Total long-term debt and finance lease obligations 64,997 67,144 Current portion 6,056 6,804 Noncurrent portion $ 58,941 $ 60,340 (a) Excludes the effect of any related interest rate swaps. 75 | 2025 Form 10-K Senior notes are redeemable prior to maturity at a redemption price equal to the principal amount plus a make-whole premium and AbbVie may redeem these debt securities at par generally between one and six months prior to maturity. At December 31, 2025, the company was in compliance with its senior note covenants and term loan covenants. Maturities of Long-Term Debt as of and for the years ending December 31 (in millions) 2026 $ 6,000 2027 5,130 2028 4,466 2029 8,645 2030 1,000 Thereafter 39,262 Total long-term debt 64,503 Fair value hedges, unamortized bond premiums/discounts, deferred financing costs, finance lease obligations and financing liability 494 Total long-term debt and finance lease obligations $ 64,997 Issuance and Repayment of Long-Term Debt In 2025, the company issued $ 4.0 billion aggregate principal amount of unsecured senior notes. The notes are unsecured, unsubordinated obligations of AbbVie and will rank equally in right of payment with all of AbbVie’s existing and future unsecured, unsubordinated indebtedness, liabilities and other obligations. AbbVie may redeem the fixed-rate senior notes prior to maturity at a redemption price equal to the greater of the principal amount or the sum of present values of the remaining scheduled payments of principal and interest plus a make-whole premium. AbbVie may also redeem the fixed-rate senior notes at par between one and six months prior to maturity. The company also repaid $ 3.0 billion aggregate principal amount of 3.80 % senior notes and $ 3.8 billion aggregate principal amount of 3.60 % senior notes at maturity. In 2024, the company repaid $ 3.8 billion aggregate principal amount of 2.60 % senior notes, € 1.5 billion aggregate principal amount of 1.38 % senior euro notes, € 700 million aggregate principal amount of 1.25 % senior euro notes and $ 1.0 billion aggregate principal amount of 3.85 % senior notes. During the quarter ended December 31, 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 at a fixed rate of 4.549 %. These term notes rank equally with all other unsecured and unsubordinated indebtedness of the company. AbbVie may redeem the fixed-rate term notes between fifteen and twenty-one months at a redemption price equal to the notional amount plus one percent make whole amount and can be redeemed at par after twenty-one months. All other significant terms of the loan remained unchanged after the refinancing. Financing Related to ImmunoGen and Cerevel Therapeutics Acquisitions In connection with the acquisitions of ImmunoGen and Cerevel Therapeutics, in February 2024, the company issued $ 15.0 billion aggregate principal amount of unsecured senior notes. The notes are unsecured, unsubordinated obligations of AbbVie and will rank equally in right of payment with all of AbbVie’s existing and future unsecured, unsubordinated indebtedness, liabilities and other obligations. AbbVie may redeem the fixed-rate senior notes prior to maturity at a redemption price equal to the greater of the principal amount or the sum of present values of the remaining scheduled payments of principal and interest on the fixed-rate senior notes to be redeemed plus a make-whole premium. AbbVie may also redeem the fixed-rate senior notes at par between one and six months prior to maturity. In connection with the offering, debt issuance costs incurred totaled $ 99 million and debt discounts totaled $ 37 million, which are being amortized over the respective terms of the notes to interest expense, net in the consolidated statements of earnings. AbbVie used the net proceeds received from the issuance of the notes to finance the acquisition of ImmunoGen, repay its term-loan, repay commercial paper borrowings, pay fees and expenses in respect of the foregoing, finance general corporate purposes and, together with cash on hand, fund AbbVie’s acquisition of Cerevel Therapeutics. See Note 5 for additional information. In December 2023, 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. Interest charged on this borrowing was based on Secured Overnight Financing Rate Reference Rate (SOFR) + 0.975 % with an effective interest rate of 6.29 %. Subsequent to the $ 15.0 billion issuance of senior notes, AbbVie terminated both the bridge 2025 Form 10-K | 76 and term loan credit agreements in the first quarter of 2024. 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 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 December 31, 2024. The company also assumed 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. 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. Short-Term Borrowings Short-term borrowings included commercial paper borrowings of $ 499 million as of December 31, 2025. There were no commercial paper borrowings outstanding as of December 31, 2024. The weighted average interest rate on commercial paper borrowings was 4.46 % for the twelve months ended December 31, 2025 and 4.91 % for the twelve months ended December 31, 2024. In April 2025, the company entered into a $ 4.0 billion 364-day term loan credit agreement. In May 2025, the company borrowed $ 2.0 billion under this term loan credit agreement which was outstanding and included in short-term borrowings on the consolidated balance sheet as of December 31, 2025. Borrowings under the term loan bear interest at adjusted SOFR + 0.7 %. The term loan may be prepaid without penalty upon prior notice and contains covenants, all of which the company was in compliance with as of December 31, 2025. In January 2025, AbbVie entered into a new $ 3.0 billion five-year revolving credit facility that matures in January 2030 which is in addition to the existing $ 5.0 billion five-year revolving credit facility that matures in March 2028. The revolving credit facilities are available to support AbbVie's commercial paper program and enable the company to borrow funds to meet the liquidity requirements on an unsecured basis at variable interest rates and contain various covenants. At December 31, 2025, the company was in compliance with all covenants, and commitment fees under the revolving credit facilities were insignificant. No amounts were outstanding under the company's revolving credit facilities as of December 31, 2025 and December 31, 2024. Contingencies and Guarantees In connection with the separation, AbbVie has indemnified Abbott for all liabilities resulting from the operation of AbbVie's business other than income tax liabilities with respect to periods prior to the distribution date and other liabilities as agreed to by AbbVie and Abbott. AbbVie has no material exposures to off-balance sheet arrangements and no special-purpose entities. In the ordinary course of business, AbbVie has periodically entered into third-party agreements, such as the assignment of product rights, which have resulted in AbbVie becoming secondarily liable for obligations for which AbbVie had previously been primarily liable. Based upon past experience, the likelihood of payments under these agreements is remote. Note 11 Financial Instruments and Fair Value Measures Risk Management Policy The company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. AbbVie's hedging policy attempts to manage these risks to an acceptable level based on the company's judgment of the appropriate trade-off between risk, opportunity and costs. The company uses derivative and nonderivative instruments to reduce its exposure to foreign currency exchange rates. AbbVie also periodically enters into interest rate swaps in which the company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. Derivative instruments are not used for trading purposes or to manage 77 | 2025 Form 10-K exposure to changes in interest rates for investment securities, and none of the company's outstanding derivative instruments contain credit risk related contingent features; collateral is generally not required. Financial Instruments Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling $ 2.5 billion at December 31, 2025 and $ 1.9 billion at December 31, 2024, are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than 24 months. Accumulated gains and losses as of December 31, 2025 are reclassified from AOCI and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement. The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated debt, trade payables, receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are recognized in net foreign exchange loss in the consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $ 9.2 billion at December 31, 2025 and $ 5.9 billion at December 31, 2024. 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 € 3.1 billion at December 31, 2025 and December 31, 2024. In addition, the company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling € 6.5 billion, SEK 1.4 billion, CAD 500 million and CHF 80 million at December 31, 2025 and € 6.2 billion, SEK 1.4 billion, CAD 500 million and CHF 50 million at December 31, 2024. 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 $ 1.8 billion at December 31, 2025 and $ 3.5 billion at December 31, 2024. The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount. No amounts are excluded from the assessment of effectiveness for cash flow hedges or fair value hedges. The following table summarizes the amounts and location of AbbVie's derivative instruments on the consolidated balance sheets: Fair value - Derivatives in asset position Fair value - Derivatives in liability position as of December 31 (in millions) Balance sheet caption 2025 2024 Balance sheet caption 2025 2024 Foreign currency forward exchange contracts Designated as cash flow hedges Prepaid expenses and other $ 35 $ 119 Accounts payable and accrued liabilities $ 51 $ 5 Designated as cash flow hedges Other assets 1 — Other long-term liabilities — — Designated as net investment hedges Prepaid expenses and other — 4 Accounts payable and accrued liabilities 220 — Designated as net investment hedges Other assets — 148 Other long-term liabilities 228 — Not designated as hedges Prepaid expenses and other 25 42 Accounts payable and accrued liabilities 20 30 Interest rate swap contracts Designated as fair value hedges Prepaid expenses and other — — Accounts payable and accrued liabilities 21 — Designated as fair value hedges Other assets 30 — Other long-term liabilities — 231 Total derivatives $ 91 $ 313 $ 540 $ 266 While certain derivatives are subject to netting arrangements with the company's counterparties, the company does not offset derivative assets and liabilities within the consolidated balance sheets. 2025 Form 10-K | 78 The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss): years ended in December 31 (in millions) 2025 2024 2023 Foreign currency forward exchange contracts Designated as cash flow hedges $ ( 81 ) $ 192 $ ( 2 ) Designated as net investment hedges ( 674 ) 435 ( 144 ) Other — — ( 6 ) Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax losses of $ 19 million into cost of products sold for foreign currency cash flow hedges and pre-tax gains of $ 21 million into interest expense, net for other 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 income (loss) pre-tax losses of $ 418 million in 2025, pre-tax gains of $ 305 million in 2024 and pre-tax losses of $ 252 million in 2023. The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the consolidated statements of earnings, including the net gains (losses) reclassified out of AOCI into net earnings. See Note 13 for the amount of net gains (losses) reclassified out of AOCI. years ended December 31 (in millions) Statement of earnings caption 2025 2024 2023 Foreign currency forward exchange contracts Designated as cash flow hedges Cost of products sold $ 66 $ 73 $ 77 Designated as net investment hedges Interest expense, net 145 123 112 Not designated as hedges Net foreign exchange loss ( 31 ) 6 33 Interest rate swap contracts Designated as fair value hedges Interest expense, net 134 62 98 Debt designated as hedged item in fair value hedges Interest expense, net ( 134 ) ( 62 ) ( 98 ) Other Interest expense, net 21 23 18 Fair Value Measures The fair value hierarchy consists of the following three levels: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access; • Level 2—Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and • Level 3—Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company's management about the assumptions market participants would use in pricing the asset or liability. 79 | 2025 Form 10-K The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the consolidated balance sheet as of December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 Basis of fair value measurement Basis of fair value measurement (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets Cash and equivalents $ 5,229 $ 4,868 $ 361 $ — $ 5,524 $ 5,179 $ 345 $ — Money market funds and time deposits 10 — 10 — 10 — 10 — Debt securities 24 — 24 — 33 — 33 — Equity securities 103 62 41 — 98 70 28 — Interest rate swap contracts 30 — 30 — — — — — Foreign currency contracts 61 — 61 — 313 — 313 — Total assets $ 5,457 $ 4,930 $ 527 $ — $ 5,978 $ 5,249 $ 729 $ — Liabilities Interest rate swap contracts $ 21 $ — $ 21 $ — $ 231 $ — $ 231 $ — Foreign currency contracts 519 — 519 — 35 — 35 — Financing liability 378 — — 378 328 — — 328 Contingent consideration 25,374 — — 25,374 21,666 — — 21,666 Total liabilities $ 26,292 $ — $ 540 $ 25,752 $ 22,260 $ — $ 266 $ 21,994 Money market funds and time deposits are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves. Equity securities primarily consist of investments for which the fair values were determined by using the published market prices per unit multiplied by the number of units held, without consideration of transaction costs. 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 financing arrangements which the company elected to account for 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, 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, net in the consolidated statements of earnings and included a charge of $ 50 million in 2025 and $ 82 million in 2024. The change in fair value attributable to instrument-specific credit risk is recognized in other comprehensive income (loss) and were insignificant in 2025 and 2024. 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. The potential contingent consideration payments are estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which are then discounted to present value. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of 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. 2025 Form 10-K | 80 The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs: 2025 2024 years ended December 31 (in millions) Range Weighted Average (a) Range Weighted Average (a) Discount rate 3.7 % - 4.8 % 4.0 % 4.6 % - 5.2 % 4.8 % Probability of payment for royalties by indication 100 % 100 % 100 % 100 % Projected year of payments 2026 - 2037 2030 2025 - 2034 2029 (a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities. 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 contingent consideration liabilities which are measured using Level 3 inputs: years ended December 31 (in millions) 2025 2024 2023 Beginning balance $ 21,666 $ 19,890 $ 16,384 Additions (a) 78 — — Change in fair value recognized in net earnings 6,495 3,771 5,128 Payments ( 2,865 ) ( 1,995 ) ( 1,622 ) Ending balance $ 25,374 $ 21,666 $ 19,890 (a) Additions during the year ended December 31, 2025, represent contingent consideration liabilities related to the Nimble acquisition. The change in fair value recognized in net earnings is recorded in other expense, net in the consolidated statements of earnings and included charges of $ 6.5 billion in 2025, $ 3.8 billion in 2024 and $ 5.1 billion in 2023. In 2025, the change in fair value reflected higher estimated Skyrizi sales, the passage of time, lower discount rates and a longer estimated royalty period. In 2024, the change in fair value reflected higher estimated Skyrizi sales and the passage of time, partially offset by higher discount rates. In 2023, the change in fair value reflected higher estimated Skyrizi sales, the passage of time and lower discount rates. 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 consolidated statements of cash flows. 81 | 2025 Form 10-K Certain financial instruments are carried at historical cost or some basis other than fair value. The book value, fair value and bases used to measure the fair value of certain financial instruments as of December 31, 2025 are shown in the table below: Basis of fair value measurement (in millions) Book value Fair value Level 1 Level 2 Level 3 Liabilities Short-term borrowings $ 2,499 $ 2,497 $ — $ 2,497 $ — Current portion of long-term debt and finance lease obligations (a) 6,016 5,985 5,965 20 — Long-term debt and finance lease obligations (a) 58,650 55,822 53,381 2,441 — Total liabilities $ 67,165 $ 64,304 $ 59,346 $ 4,958 $ — (a) Excludes the effects of fair value hedges and financing liability. The book value, fair value and bases used to measure the fair value of certain financial instruments as of December 31, 2024 are shown in the table below: Basis of fair value measurement (in millions) Book value Fair value Level 1 Level 2 Level 3 Liabilities Current portion of long-term debt and finance lease obligations (a) $ 6,797 $ 6,767 $ 6,620 $ 147 $ — Long-term debt and finance lease obligations (a) 60,243 55,836 53,441 2,395 — Total liabilities $ 67,040 $ 62,603 $ 60,061 $ 2,542 $ — (a) Excludes the effects of fair value hedges and financing liability. AbbVie also holds investments in equity securities that do not have readily determinable fair values. 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 $ 159 million as of December 31, 2025 and $ 169 million as of December 31, 2024. No significant cumulative upward or downward adjustments have been recorded for these investments as of December 31, 2025. Concentrations of Risk Of total net accounts receivable, three U.S. wholesalers accounted for 84 % as of December 31, 2025 and 81 % as of December 31, 2024, and substantially all of AbbVie's pharmaceutical product net revenues in the United States were to these three wholesalers. 2025 Form 10-K | 82 Note 12 Post-Employment Benefits AbbVie sponsors various pension and other post-employment benefit plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. In addition, AbbVie provides medical benefits, primarily to eligible retirees in the United States and Puerto Rico, through other post-retirement benefit plans. Net obligations for these plans have been recognized on the consolidated balance sheets as of December 31, 2025 and 2024. The following table summarizes benefit plan information for the global AbbVie-sponsored defined benefit and other post-employment plans: Defined benefit plans Other post-employment plans as of and for the years ended December 31 (in millions) 2025 2024 2025 2024 Projected benefit obligations Beginning of period $ 8,964 $ 9,544 $ 786 $ 796 Service cost 264 286 40 43 Interest cost 484 451 44 41 Actuarial (gain) loss 124 ( 855 ) ( 12 ) ( 62 ) Benefits paid ( 371 ) ( 347 ) ( 37 ) ( 31 ) Other, primarily foreign currency translation adjustments 193 ( 115 ) 1 ( 1 ) End of period 9,658 8,964 822 786 Fair value of plan assets Beginning of period 10,551 9,839 — — Actual return on plan assets 1,434 865 — — Company contributions 348 326 37 31 Benefits paid ( 371 ) ( 347 ) ( 37 ) ( 31 ) Other, primarily foreign currency translation adjustments 242 ( 132 ) — — End of period 12,204 10,551 — — Funded status, end of period $ 2,546 $ 1,587 $ ( 822 ) $ ( 786 ) Amounts recognized on the consolidated balance sheets Other assets $ 3,196 $ 2,097 $ — $ — Accounts payable and accrued liabilities ( 23 ) ( 20 ) ( 39 ) ( 42 ) Other long-term liabilities ( 627 ) ( 490 ) ( 783 ) ( 744 ) Net asset (obligation) $ 2,546 $ 1,587 $ ( 822 ) $ ( 786 ) Actuarial loss, net $ 770 $ 1,303 $ 181 $ 203 Prior service cost (credit) 1 1 ( 225 ) ( 261 ) Accumulated other comprehensive loss (income) $ 771 $ 1,304 $ ( 44 ) $ ( 58 ) Related to international defined benefit plans the projected benefit obligations in the table above included $ 2.3 billion at December 31, 2025 and $ 2.2 billion at December 31, 2024. For plans reflected in the table above, the accumulated benefit obligations were $ 8.7 billion at December 31, 2025 and $ 8.1 billion at December 31, 2024. The 2025 actuarial loss of $ 124 million for qualified pension plans was primarily driven by experience losses, partially offset by higher discount rates. The 2024 actuarial gain of $ 855 million for qualified pension plans was primarily driven by higher discount rates. 83 | 2025 Form 10-K Information For Pension Plans With An Accumulated Benefit Obligation In Excess Of Plan Assets as of December 31 (in millions) 2025 2024 Accumulated benefit obligation $ 647 $ 527 Fair value of plan assets 99 94 Information For Pension Plans With A Projected Benefit Obligation In Excess Of Plan Assets as of December 31 (in millions) 2025 2024 Projected benefit obligation $ 749 $ 775 Fair value of plan assets 99 265 Amounts Recognized in Other Comprehensive Income (Loss) The following table summarizes the pre-tax losses (gains) included in other comprehensive income (loss): years ended December 31 (in millions) 2025 2024 2023 Defined benefit plans Actuarial gain $ ( 478 ) $ ( 935 ) $ ( 16 ) Amortization of prior service cost — — ( 1 ) Amortization of actuarial loss ( 31 ) ( 52 ) ( 16 ) Foreign exchange gain and other ( 24 ) — ( 44 ) Total gain $ ( 533 ) $ ( 987 ) $ ( 77 ) Other post-employment plans Actuarial loss (gain) $ ( 12 ) $ ( 62 ) $ 89 Amortization of prior service credit 36 36 36 Amortization of actuarial loss ( 10 ) ( 17 ) ( 12 ) Total loss (gain) $ 14 $ ( 43 ) $ 113 Net Periodic Benefit Cost years ended December 31 (in millions) 2025 2024 2023 Defined benefit plans Service cost $ 264 $ 286 $ 270 Interest cost 484 451 432 Expected return on plan assets ( 832 ) ( 785 ) ( 723 ) Amortization of prior service cost — — 1 Amortization of actuarial loss 31 52 16 Net periodic benefit cost (credit) $ ( 53 ) $ 4 $ ( 4 ) Other post-employment plans Service cost $ 40 $ 43 $ 37 Interest cost 44 41 37 Amortization of prior service credit ( 36 ) ( 36 ) ( 36 ) Amortization of actuarial loss 10 17 12 Net periodic benefit cost $ 58 $ 65 $ 50 The components of net periodic benefit cost other than service cost are included in other expense, net in the consolidated statements of earnings. 2025 Form 10-K | 84 Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date as of December 31 2025 2024 Defined benefit plans Discount rate 5.5 % 5.4 % Rate of compensation increases 4.1 % 4.4 % Cash balance interest crediting rate 5.0 % 4.0 % Other post-employment plans Discount rate 5.6 % 5.7 % The assumptions used in calculating the December 31, 2025 measurement date benefit obligations will be used in the calculation of net periodic benefit cost in 2026. Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost years ended December 31 2025 2024 2023 Defined benefit plans Discount rate for determining service cost 5.4 % 4.8 % 5.0 % Discount rate for determining interest cost 5.2 % 4.8 % 4.9 % Expected long-term rate of return on plan assets 7.6 % 7.5 % 7.3 % Expected rate of change in compensation 4.1 % 4.4 % 4.8 % Cash balance interest crediting rate 4.0 % 4.4 % 2.7 % Other post-employment plans Discount rate for determining service cost 5.9 % 5.2 % 5.3 % Discount rate for determining interest cost 5.5 % 4.9 % 5.1 % For the December 31, 2025 post-retirement health care obligations remeasurement, the company assumed a 6.6 % pre-65 ( 2.2 % post-65) annual rate of increase in the per capita cost of covered health care benefits. The pre-65 rate was assumed to decrease gradually to 4.5 % ( 1.6 % post-65) in 2035 and remain at that level thereafter. For purposes of measuring the 2025 post-retirement health care costs, the company assumed a 6.6 % pre-65 ( 2.0 % post-65) annual rate of increase in the per capita cost of covered health care benefits. The pre-65 rate was assumed to decrease gradually to 4.5 % ( 1.8 % post-65) for 2033 and remain at that level thereafter. 85 | 2025 Form 10-K Defined Benefit Pension Plan Assets December 31, 2025 December 31, 2024 Basis of fair value measurement Basis of fair value measurement as of December 31 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Equities U.S. large cap (a) $ 1,376 $ 1,376 $ — $ — $ 1,131 $ 1,131 $ — $ — U.S. mid cap (b) 130 130 — — 176 176 — — International (c) 573 573 — — 408 408 — — Fixed income securities U.S. government (d) 405 6 399 — 414 18 396 — Corporate debt (d) 668 84 584 — 609 29 580 — Non-U.S. government (d) 447 146 301 — 346 183 163 — Other (d) 56 51 5 — 20 15 5 — Absolute return funds (e) 152 20 132 — 176 82 94 — Other (f) 468 467 1 — 351 350 1 — Total $ 4,275 $ 2,853 $ 1,422 $ — $ 3,631 $ 2,392 $ 1,239 $ — Total assets measured at NAV 7,929 6,920 Fair value of plan assets $ 12,204 $ 10,551 (a) A mix of index funds and actively managed equity accounts that are benchmarked to various large cap indices. (b) A mix of index funds and actively managed equity accounts that are benchmarked to various mid cap indices. (c) A mix of index funds and actively managed equity accounts that are benchmarked to various non-U.S. equity indices in both developed and emerging markets. (d) Securities held by actively managed accounts, index funds and mutual funds. (e) Primarily funds having global mandates with the flexibility to allocate capital broadly across a wide range of asset classes and strategies, including but not limited to equities, fixed income, commodities, financial futures, currencies and other securities, with objectives to outperform agreed upon benchmarks of specific return and volatility targets. (f) Investments in cash and equivalents. Equities and registered investment companies having quoted prices are valued at the published market prices. Fixed income securities that are valued using significant other observable inputs are quoted at prices obtained from independent financial service industry-recognized vendors. Investments held in pooled investment funds, common collective trusts or limited partnerships are valued at the net asset value (NAV) practical expedient to estimate fair value. The NAV is provided by the fund administrator and is based on the value of the underlying assets owned by the fund minus its liabilities. The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return, balancing higher return, more volatile equity securities and lower return, less volatile fixed income securities. Investment allocations are established for each plan and are generally made across a range of markets, industry sectors, capitalization sizes and in the case of fixed income securities, maturities and credit quality. The 2025 target investment allocation for the AbbVie Pension Plan was 62.5 % in equity securities, 22.5 % in fixed income securities and 15 % in asset allocation strategies and other holdings. There are no known significant concentrations of risk in the plan assets of the AbbVie Pension Plan or of any other plans. The expected return on plan assets assumption for each plan is based on management's expectations of long-term average rates of return to be achieved by the underlying investment portfolio. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, as well as current economic and capital market conditions. 2025 Form 10-K | 86 Expected Benefit Payments The following table summarizes total benefit payments expected to be paid to plan participants including payments funded from both plan and company assets: years ending December 31 (in millions) Defined benefit plans Other post-employment plans 2026 $ 396 $ 39 2027 422 43 2028 449 47 2029 482 51 2030 517 55 2031 to 2035 3,054 342 Defined Contribution Plan AbbVie maintains defined contribution savings plans for the benefit of its eligible employees. The expense recognized for these plans was $ 504 million in 2025, $ 425 million in 2024 and $ 398 million in 2023. AbbVie provides certain other post-employment benefits, primarily salary continuation arrangements, to qualifying employees and accrues for the related cost over the service lives of the employees. Note 13 Equity Stock-Based Compensation In 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (Amended Plan), which amends and restates the AbbVie 2013 Incentive Stock Program (2013 ISP). AbbVie grants stock-based awards to eligible employees pursuant to the Amended Plan, which provides for several different forms of benefits, including non-qualified stock options, RSUs and various performance-based awards. Under the Amended Plan, a total of 144 million shares of AbbVie common stock have been reserved for issuance as awards to AbbVie employees. AbbVie measures compensation expense for stock-based awards based on the grant date fair value of the awards and the estimated number of awards that are expected to vest. Forfeitures are estimated based on historical experience at the time of grant and are revised in subsequent periods if actual forfeitures differ from those estimates. Compensation cost for stock-based awards is amortized over the service period, which could be shorter than the vesting period if an employee is retirement eligible. Retirement eligible employees generally are those who are age 55 or older and have at least 10 years of service. Stock-based compensation expense is principally related to awards issued pursuant to the 2013 ISP and the Amended Plan and is summarized as follows: years ended December 31 (in millions) 2025 2024 2023 Cost of products sold $ 52 $ 55 $ 46 Research and development 386 341 278 Selling, general and administrative 517 515 423 Pre-tax compensation expense 955 911 747 Tax benefit ( 170 ) ( 159 ) ( 136 ) After-tax compensation expense $ 785 $ 752 $ 611 Realized excess tax benefits associated with stock-based compensation totaled $ 58 million in 2025, $ 84 million in 2024 and $ 90 million in 2023. 87 | 2025 Form 10-K In addition to stock-based compensation expense included in the table above, in connection with the 2025 acquisition of Capstan and the 2024 acquisitions of ImmunoGen and Cerevel Therapeutics, AbbVie incurred cash-settled, post-closing expense for employee incentive awards, which is summarized in the table below: years ended December 31 (in millions) 2025 2024 Cost of products sold $ — $ 36 Research and development 28 184 Selling, general and administrative 67 290 Total post-closing cash settled expense $ 95 $ 510 Stock Options Stock options awarded to employees typically have a contractual term of 10 years and generally vest in one-third increments over a 3-year period. The exercise price is equal to at least 100 % of the market value on the date of grant. The fair value is determined using the Black-Scholes model. The weighted-average grant-date fair values of stock options granted were $ 38.39 in 2025, $ 31.53 in 2024 and $ 29.89 in 2023. The following table summarizes AbbVie stock option activity in 2025: (options in thousands, aggregate intrinsic value in millions) Options Weighted- average exercise price Weighted-average remaining life (in years) Aggregate intrinsic value Outstanding at December 31, 2024 5,613 $ 117.48 5.6 $ 338 Granted 561 192.86 Exercised ( 1,684 ) 102.87 Lapsed and forfeited ( 119 ) 128.13 Outstanding at December 31, 2025 4,371 $ 132.49 5.9 $ 420 Exercisable at December 31, 2025 3,175 $ 114.97 4.9 $ 360 The total intrinsic value of options exercised was $ 177 million in 2025, $ 202 million in 2024 and $ 189 million in 2023. The total fair value of options vested during 2025 was $ 19 million. As of December 31, 2025, $ 7 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 RSUs awarded to employees other than senior executives and other key employees generally vest in ratable increments over a three -year period. Recipients of these RSUs are entitled to receive dividend equivalents as dividends are declared and paid during the RSU vesting period. The majority of the equity awards AbbVie grants to its senior executives and other key employees are performance-based. Equity awards granted to senior executives and other key employees consist of a combination of performance-vested RSUs and performance shares as well as non-qualified stock options described above. The performance-vested RSUs have the potential to vest in one-third increments during a three-year performance period and may be earned based on AbbVie’s return on invested capital (ROIC) performance relative to a defined peer group of pharmaceutical, biotech and life science companies. The recipient may receive one share of AbbVie common stock for each vested award. The performance shares have the potential to vest over a three-year performance period and may be earned based on AbbVie’s EPS achievement and AbbVie’s total stockholder return (TSR) (a market condition) relative to a defined peer group of pharmaceutical, biotech and life sciences companies. Dividend equivalents on performance-vested RSUs and performance shares accrue during the performance period and are payable at vesting only to the extent that shares are earned. The weighted-average grant-date fair value of RSUs and performance shares generally is determined based on the number of shares/units granted and the quoted price of AbbVie’s common stock on the date of grant. The weighted-average grant-date fair values of performance shares with a TSR market condition are determined using the Monte Carlo simulation model. 2025 Form 10-K | 88 The following table summarizes AbbVie RSU and performance share activity for 2025: (share units in thousands) Share units Weighted-average grant date fair value Outstanding at December 31, 2024 10,387 $ 159.52 Granted 4,885 191.21 Vested ( 5,244 ) 154.24 Forfeited ( 460 ) 176.81 Outstanding at December 31, 2025 9,568 $ 177.76 The fair market value of RSUs and performance shares (as applicable) vested was $ 1.0 billion in 2025, $ 1.1 billion in 2024 and $ 1.0 billion in 2023. 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 5 for additional information regarding the ImmunoGen and Cerevel Therapeutics acquisitions. As of December 31, 2025, $ 615 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 Cash dividends declared per common share totaled $ 6.65 in 2025, $ 6.29 in 2024 and $ 5.99 in 2023. The following table summarizes quarterly cash dividends declared during 2025, 2024 and 2023: 2025 2024 2023 Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share Date Declared Payment Date Dividend Per Share 10/31/25 02/17/26 $ 1.73 10/30/24 02/14/25 $ 1.64 10/26/23 02/15/24 $ 1.55 09/05/25 11/14/25 $ 1.64 09/06/24 11/15/24 $ 1.55 09/08/23 11/15/23 $ 1.48 06/20/25 08/15/25 $ 1.64 06/21/24 08/15/24 $ 1.55 06/22/23 08/15/23 $ 1.48 02/13/25 05/15/25 $ 1.64 02/15/24 05/15/24 $ 1.55 02/16/23 05/15/23 $ 1.48 Stock Repurchase Program The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management’s discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under this program are recorded at acquisition cost, including related expenses and are available for general corporate purposes. AbbVie repurchased 3 million shares for $ 606 million in 2025, 7 million shares for $ 1.3 billion in 2024 and 10 million shares for $ 1.6 billion in 2023. AbbVie's remaining stock repurchase authorization was $ 2.9 billion as of December 31, 2025. On February 16, 2023, AbbVie's board of directors authorized a $ 5.0 billion increase to the existing stock repurchase authorization. 89 | 2025 Form 10-K Accumulated Other Comprehensive Loss The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for 2025, 2024 and 2023: (in millions) (brackets denote losses) Foreign currency translation adjustments Net investment hedging activities Pension and post-employment benefits Cash flow hedging activities Total Balance as of December 31, 2022 $ ( 1,513 ) $ 464 $ ( 1,458 ) $ 308 $ ( 2,199 ) Other comprehensive income (loss) before reclassifications 407 ( 311 ) ( 23 ) ( 10 ) 63 Net gains reclassified from accumulated other comprehensive loss — ( 88 ) ( 7 ) ( 74 ) ( 169 ) Net current-period other comprehensive income (loss) 407 ( 399 ) ( 30 ) ( 84 ) ( 106 ) Balance as of December 31, 2023 ( 1,106 ) 65 ( 1,488 ) 224 ( 2,305 ) Other comprehensive income (loss) before reclassifications ( 1,008 ) 580 799 155 526 Net losses (gains) reclassified from accumulated other comprehensive loss — ( 96 ) 25 ( 75 ) ( 146 ) Net current-period other comprehensive income (loss) ( 1,008 ) 484 824 80 380 Balance as of December 31, 2024 ( 2,114 ) 549 ( 664 ) 304 ( 1,925 ) Other comprehensive income (loss) before reclassifications 1,481 ( 857 ) 419 ( 83 ) 960 Net losses (gains) reclassified from accumulated other comprehensive loss — ( 114 ) 2 ( 67 ) ( 179 ) Net current-period other comprehensive income (loss) 1,481 ( 971 ) 421 ( 150 ) 781 Balance as of December 31, 2025 $ ( 633 ) $ ( 422 ) $ ( 243 ) $ 154 $ ( 1,144 ) Other comprehensive income (loss) for 2025 included pension and post-employment benefit plan gains of $ 421 million primarily due to gains on plan assets and higher discount rates partially offset by experience losses. Other comprehensive income (loss) also included foreign currency translation adjustments totaling gains of $ 1.5 billion 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 losses of $ 971 million. Other comprehensive income (loss) for 2024 included pension and post-employment benefit plan gains of $ 824 million primarily due to actuarial gains driven by higher discount rates. Other comprehensive income (loss) for 2024 also included foreign currency translation adjustments totaling losses of $ 1.0 billion 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 gains of $ 484 million. Other comprehensive income (loss) for 2023 included foreign currency translation adjustments totaling gains of $ 407 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 losses of $ 399 million. 2025 Form 10-K | 90 The table below presents the impact on AbbVie's consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss: years ended December 31 (in millions) (brackets denote gains) 2025 2024 2023 Net investment hedging activities Gains on derivative amount excluded from effectiveness testing (a) $ ( 145 ) $ ( 123 ) $ ( 112 ) Tax expense 31 27 24 Total reclassifications, net of tax $ ( 114 ) $ ( 96 ) $ ( 88 ) Pension and post-employment benefits Amortization of actuarial losses (gains) and other (b) $ 5 $ 33 $ ( 7 ) Tax benefit ( 3 ) ( 8 ) — Total reclassifications, net of tax $ 2 $ 25 $ ( 7 ) Cash flow hedging activities Gains on foreign currency forward exchange contracts (c) $ ( 66 ) $ ( 73 ) $ ( 77 ) Other (d) ( 21 ) ( 23 ) ( 18 ) Tax expense 20 21 21 Total reclassifications, net of tax $ ( 67 ) $ ( 75 ) $ ( 74 ) (a) Amounts are included in interest expense, net (see Note 11). (b) Amounts are included in the computation of net periodic benefit cost (see Note 12). (c) Amounts are included in cost of products sold (see Note 11). (d) Amounts are included in net foreign exchange loss and interest expense, net (see Note 11). Other In addition to common stock, AbbVie's authorized capital includes 200 million shares of preferred stock, par value $ 0.01 . As of December 31, 2025, no shares of preferred stock were issued or outstanding. Note 14 Income Taxes Earnings Before Income Tax Expense years ended December 31 (in millions) 2025 2024 2023 Domestic $ ( 3,540 ) $ ( 7,743 ) $ ( 3,475 ) Foreign 10,137 11,459 9,725 Total earnings before income tax expense $ 6,597 $ 3,716 $ 6,250 Income Tax Expense years ended December 31 (in millions) 2025 2024 2023 Current Domestic $ 1,230 $ ( 331 ) $ 3,272 Foreign 1,626 1,210 994 Total current taxes $ 2,856 $ 879 $ 4,266 Deferred Domestic $ ( 61 ) $ ( 1,303 ) $ ( 2,324 ) Foreign ( 431 ) ( 146 ) ( 565 ) Total deferred taxes $ ( 492 ) $ ( 1,449 ) $ ( 2,889 ) Total income tax expense (benefit) $ 2,364 $ ( 570 ) $ 1,377 91 | 2025 Form 10-K Effective Tax Rate Reconciliation ASU 2023-09 was adopted on a prospective basis for the year ended December 31, 2025, accordingly the following table has been included which reconciles the U.S. federal statutory tax rate and expense to the effective tax rate: year ended December 31 (dollars in millions, except for percentages) 2025 Statutory tax rate $ 1,385 21.0 % Foreign tax effects Puerto Rico Tax rate differential 1,426 21.6 Impact from industrial development income ( 2,989 ) ( 45.3 ) Other ( 23 ) ( 0.3 ) Bermuda Tax rate differential 104 1.6 Valuation allowances 286 4.3 Other ( 14 ) ( 0.2 ) Ireland Tax rate differential ( 115 ) ( 1.7 ) Net operating loss utilization 101 1.5 Other ( 7 ) ( 0.1 ) Malta Tax rate differential ( 118 ) ( 1.8 ) Deduction on equity ( 128 ) ( 1.9 ) Non-deductible items 241 3.7 Other 35 0.5 All other, net 94 1.4 Effect of cross-border tax laws Global intangible low-taxed income, net of foreign tax credit (FTC) 1,114 16.9 U.S. tax impact of branch accounting, net of FTC ( 149 ) ( 2.3 ) Other 99 1.5 Tax credits ( 142 ) ( 2.2 ) Unrecognized tax benefits 654 9.9 Change in valuation allowances ( 94 ) ( 1.4 ) Non-taxable and non-deductible acquisition costs 649 9.8 All other, net ( 45 ) ( 0.7 ) Effective tax rate $ 2,364 35.8 % 2025 Form 10-K | 92 As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows: years ended December 31 2024 2023 Statutory tax rate 21.0 % 21.0 % Effect of foreign operations 7.6 8.0 U.S. tax credits ( 5.4 ) ( 3.1 ) Stock-based compensation ( 1.2 ) ( 1.0 ) Non-deductible expenses 1.1 0.7 Tax law changes and related structuring ( 0.3 ) ( 3.8 ) Tax audits, settlements and reserves ( 51.4 ) ( 1.1 ) Acquisition costs 13.4 0.2 All other, net ( 0.1 ) 1.1 Effective tax rate ( 15.3 ) % 22.0 % The effective income tax rate fluctuates year to year due to the allocation of the company’s taxable earnings among jurisdictions, as well as certain discrete factors and events in each year, including changes in tax law and business development activities. The effective income tax rates in 2025, 2024 and 2023 differed from the statutory tax rate principally due to the impact of foreign operations with lower income tax rates in locations outside the United States, the U.S. global minimum tax, changes in fair value of contingent consideration, tax audits and settlements, tax credits and incentives in the United States, Puerto Rico and other foreign tax jurisdictions, and business development activities. The effective income tax rate in 2025 was higher than 2024 primarily due to a one-time tax benefit associated with the closing of a three-year U.S. IRS examination in 2024, partially offset by decreases in unrecognized tax benefits, a decrease in the impact of acquisition costs related to certain business development activities and a decrease related to the impact of changes in fair value of contingent consideration. The effective income tax rate in 2024 was lower than 2023 due to the closing of the U.S. IRS examination, partially offset by increases in unrecognized tax benefits pertaining to prior years. The Tax Cuts and Jobs Act (2017 Act) was signed into law in December 2017, resulting in significant changes to the U.S. corporate tax system, including a one-time transition tax on a mandatory deemed repatriation of earnings of certain foreign subsidiaries that were previously untaxed. The 2017 Act also created a U.S. global minimum tax on certain foreign sourced earnings. The company’s accounting policy for the minimum tax on foreign sourced earnings is to report the tax effects on the basis that the minimum tax will be recognized in tax expense in the year it is incurred as a period expense. On July 4, 2025, the United States government signed into law the One Big Beautiful Bill Act of 2025 (2025 Act). Included within the 2025 Act are provisions that permanently extend certain expiring provisions of the 2017 Act, modify the international tax framework to reduce the tax rate on certain foreign earned income, restore the tax treatment of expensing for domestic research and development costs and bonus depreciation, and allow for full expensing of qualified production property. In addition, the legislation contains multiple effective dates and transition elections, with certain provisions effective in 2025 and others implemented through 2027. The new legislation had a favorable impact on cash tax payments in the current year. 93 | 2025 Form 10-K Income Taxes Paid ASU 2023-09 was adopted on a prospective basis for the year ended December 31, 2025, accordingly the following table has been included which discloses the amount of income taxes paid (net of refunds) disaggregated by jurisdiction: year ended December 31 (in millions) 2025 Domestic $ 2,185 Foreign Ireland 431 Puerto Rico 297 Other 713 Total foreign 1,441 Income taxes paid $ 3,626 As previously disclosed and prior to the adoption of ASU 2023-09, income taxes paid totaled $ 4.1 billion and $ 4.7 billion for the years ended December 31, 2024 and 2023. Deferred Tax Assets and Liabilities as of December 31 (in millions) 2025 2024 Deferred tax assets Compensation and employee benefits $ 74 $ 215 Accruals and reserves 1,133 1,253 Chargebacks and rebates 1,482 1,354 Net operating losses and other carryforwards 16,022 15,815 Other 2,504 2,222 Total deferred tax assets 21,215 20,859 Valuation allowances ( 15,018 ) ( 14,823 ) Total net deferred tax assets 6,197 6,036 Deferred tax liabilities Excess of book basis over tax basis of intangible assets ( 1,530 ) ( 1,969 ) Excess of book basis over tax basis in investments ( 322 ) ( 302 ) Other ( 630 ) ( 718 ) Total deferred tax liabilities ( 2,482 ) ( 2,989 ) Net deferred tax assets $ 3,715 $ 3,047 The increase in deferred tax assets is primarily due to losses in other comprehensive income related to net investment hedges. The decrease in deferred tax liabilities is due to the amortization and impairment of intangible assets. The company had valuation allowances of $ 15.0 billion as of December 31, 2025 and $ 14.8 billion as of December 31, 2024. These were principally related to foreign and state net operating losses and other credit carryforwards that are not expected to be realized. As of December 31, 2025, the company had U.S. federal, state and foreign credit carryforwards of $ 614 million as well as U.S. federal, state and foreign net operating loss carryforwards of $ 38.4 billion, which will expire at various times through 2045. The company also had foreign loss carryforwards of $ 35.1 billion that have no expiration. Unremitted foreign earnings subject to the 2017 Act’s transition tax are not considered indefinitely reinvested. Post-2017 earnings subject to the U.S. minimum tax on foreign sourced earnings or eligible for the 100% foreign dividends received deduction are also not considered indefinitely reinvested earnings. However, the company generally considers instances of outside basis differences in foreign subsidiaries that would incur additional U.S. tax upon reversal (e.g., capital gain distributions) to be permanent in duration. The unrecognized tax liability is not practicable to determine. 2025 Form 10-K | 94 Unrecognized Tax Benefits years ended December 31 (in millions) 2025 2024 2023 Beginning balance $ 4,401 $ 5,762 $ 5,670 Increase due to current year tax positions 337 173 129 Increase due to prior year tax positions 20 454 109 Decrease due to prior year tax positions ( 18 ) ( 1,741 ) ( 21 ) Settlements ( 222 ) ( 284 ) ( 86 ) Increase due to acquisitions 12 82 — Lapse of statutes of limitations ( 25 ) ( 45 ) ( 39 ) Ending balance $ 4,505 $ 4,401 $ 5,762 If recognized, the net amount of potential tax benefits that would impact the company's effective tax rate is $ 4.4 billion in 2025 and $ 4.3 billion in 2024. The "Increase due to current year tax positions" and "Increase due to prior year tax positions" in the table above include amounts related to federal, state and international tax items. AbbVie recognizes interest and penalties related to income tax matters in income tax expense in the consolidated statements of earnings. AbbVie recognized a gross income tax expense of $ 315 million in 2025, a gross income tax benefit of $ 179 million in 2024 and a gross income tax expense of $ 430 million in 2023 for interest and penalties related to income tax matters. AbbVie had an accrual for the payment of gross interest and penalties of $ 1.7 billion at December 31, 2025, $ 1.4 billion at December 31, 2024 and $ 1.6 billion at December 31, 2023. The company is routinely audited by the tax authorities in significant jurisdictions and various federal, state and foreign examinations are currently ongoing. All significant federal, state and international tax matters have been concluded for years before 2010. The company believes adequate provision has been made for all income tax uncertainties. Note 15 Legal Proceedings and Contingencies AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation was approximately $ 1.6 billion as of December 31, 2025 and $ 2.5 billion as of December 31, 2024. 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. Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows. Subject to certain exceptions specified in the separation agreement by and between Abbott and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters. Antitrust Litigation Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie) and a generic company 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 pending in federal court consist of six individual plaintiff lawsuits and a certified class action by Niaspan direct purchasers. The cases are pending in the United States District Court for the Eastern District of Pennsylvania for coordinated or consolidated pre-trial proceedings under the federal multi-district litigation (MDL) Rules as In re: Niaspan Antitrust Litigation, MDL No. 2460. In October 2016, the Orange County, California District Attorney’s Office filed a lawsuit on behalf of the State of California regarding the Niaspan patent litigation settlement in Orange County Superior Court, asserting a claim under the unfair competition provision of the California Business and Professions Code seeking injunctive relief, restitution, civil penalties and attorneys’ fees. 95 | 2025 Form 10-K Government Proceedings Lawsuits are pending against Allergan and several other manufacturers generally alleging that they improperly promoted and sold prescription opioid products. Approximately 335 lawsuits are pending against Allergan in federal and state courts. Most of the federal court lawsuits are consolidated for pre-trial purposes in the United States District Court for the Northern District of Ohio under the MDL rules as In re: National Prescription Opiate Litigation, MDL No. 2804. Approximately 25 of the lawsuits are pending in various state courts. The plaintiffs in these lawsuits, which include 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 335 lawsuits, approximately 20 of them are brought by counties, cities and other municipal entities, approximately 5 of which are in the process of being dismissed pursuant to the previously announced settlement. In March 2023, AbbVie Inc. filed a petition in the United States Tax Court, AbbVie Inc. and Subsidiaries v. Commissioner of Internal Revenue. The petition disputed the Commissioner of Internal Revenue 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. In June 2025, the United States Tax Court granted AbbVie’s motion for summary judgment and denied the Commissioner of Internal Revenue’s cross-motion for summary judgment. The United States Tax Court ordered and decided that there is no deficiency in income tax due from AbbVie for the tax year 2014. In September 2025, the Commissioner of Internal Revenue appealed this decision. In February 2026, the Commissioner of Internal Revenue withdrew its appeal. As a result, the United States Tax Court’s decision stands and the matter is resolved. Product Liability and General Litigation In April 2023, a putative class action lawsuit, Camargo v. AbbVie Inc., was filed in the United States District Court for the Northern District of Illinois on behalf of Humira patients who paid for Humira based on its list price or who, after losing insurance coverage, discontinued Humira because they could not pay based on its list price, alleging that Humira’s list price is excessive in violation of multiple states’ unfair and deceptive trade practices statutes. The plaintiff generally seeks monetary damages, injunctive relief, and attorneys’ fees. In January 2026, the court granted AbbVie’s motion to dismiss, without prejudice. Lawsuits are pending against various Allergan entities in the United States and other countries including Australia, Brazil, Canada and South Korea, in which plaintiffs generally allege that they developed, or may develop, breast implant-associated anaplastic large cell lymphoma (ALCL) or other injuries from Allergan’s Biocell textured breast implants, which were voluntarily withdrawn from worldwide markets in 2019. Approximately 150 ALCL lawsuits and 1,320 other lawsuits are coordinated for pre-trial purposes in the United States District Court for the District of New Jersey under the MDL rules as In re: Allergan Biocell Textured Breast Implant Product Liability Litigation, MDL No. 2921. Approximately 75 ALCL lawsuits and 470 other lawsuits are pending in various state courts. Approximately 70 ALCL and 1,080 other lawsuits are pending in other countries. In December 2025, the Amsterdam District Court dismissed all claims pending against Allergan and affiliated entities in the Netherlands, which dismissal is subject to appeal. Plaintiffs generally seek monetary damages, medical monitoring and attorneys’ fees. In January 2025, a putative class action lawsuit, Sheet Metal Workers’ Health Plan of Southern California, Arizona and Nevada v. AbbVie Inc., was filed in the United States District Court for the Northern District of Illinois on behalf of third-party payors of Humira, alleging that AbbVie’s rebating practices are impairing biosimilar competition with Humira in violation of federal and state antitrust laws. The plaintiff generally seeks monetary damages, injunctive relief and attorneys' fees. Intellectual Property Litigation AbbVie Inc. is seeking to enforce patent rights related to ubrogepant (a drug sold under the trademark Ubrelvy). Litigation was filed in the United States District Court for the District of New Jersey in March 2024 against Aurobindo Pharma U.S.A., Inc., Aurobindo Pharma Limited, and Apitoria Pharma Private Limited; Zydus Pharmaceuticals (USA) Inc. and Zydus Lifesciences Limited; and Hetero USA Inc., Hetero Labs Limited Unit-III, and Hetero Labs Limited. AbbVie alleges defendants’ proposed generic ubrogepant products infringe certain patents and seeks declaratory and injunctive relief. Merck Sharp & Dohme LLC, which exclusively licenses certain patents to AbbVie, is a co-plaintiff in the litigation. AbbVie is seeking to enforce patent rights related to atogepant (a drug sold under the trademark Qulipta). Litigation was filed in the United States District Court for the District of New Jersey in December 2025 and January 2026 against Apotex Inc.; Macleods Pharmaceuticals Ltd. and Macleods Pharma USA, Inc.; and Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. AbbVie alleges defendants’ proposed generic atogepant products infringe certain patents and seeks declaratory and injunctive relief. 2025 Form 10-K | 96 Note 16 Segment and Geographic Area Information AbbVie operates as a single global business segment dedicated to the research and development, manufacturing, commercialization and sale of innovative medicines and therapies. This operating structure enables the Chief Executive Officer, as Chief Operating Decision Maker (CODM), to allocate resources and assess business performance on a global basis in order to achieve established long-term strategic goals. Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, manufacturing and supply of products. Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region or therapeutic area. All of these activities are supported by a global corporate administrative staff. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the CODM for purposes of assessing performance, allocating resources and planning and forecasting future periods. The CODM regularly reviews net revenues, net earnings and significant segment expenses and uses net earnings as its principal measure of segment profit or loss. Net earnings and significant segment expenses reviewed by CODM are reported on the consolidated statement of earnings for the years ended December 31, 2025, 2024 and 2023. The CODM uses net earnings as its principal measure of segment profit or loss to compare past financial performance with current performance and analyze underlying business performance and trends. The CODM does not use segment assets to make decisions regarding resources; therefore, the total asset disclosure has not been included. Substantially all of AbbVie's pharmaceutical product net revenues in the United States are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served. The following tables detail AbbVie's worldwide net revenues: years ended December 31 (in millions) 2025 2024 2023 Immunology Skyrizi United States $ 15,202 $ 10,086 $ 6,753 International 2,360 1,632 1,010 Total $ 17,562 $ 11,718 $ 7,763 Rinvoq United States $ 5,940 $ 4,259 $ 2,824 International 2,364 1,712 1,145 Total $ 8,304 $ 5,971 $ 3,969 Humira United States $ 3,062 $ 7,142 $ 12,160 International 1,478 1,851 2,244 Total $ 4,540 $ 8,993 $ 14,404 Neuroscience Vraylar United States $ 3,612 $ 3,260 $ 2,755 International 9 7 4 Total $ 3,621 $ 3,267 $ 2,759 Botox Therapeutic United States $ 3,151 $ 2,718 $ 2,476 International 618 565 515 Total $ 3,769 $ 3,283 $ 2,991 Ubrelvy United States $ 1,239 $ 981 $ 803 International 32 25 12 Total $ 1,271 $ 1,006 $ 815 Qulipta United States $ 906 $ 628 $ 405 International 130 30 3 Total $ 1,036 $ 658 $ 408 Vyalev United States $ 167 $ 1 $ — International 315 98 3 Total $ 482 $ 99 $ 3 Duodopa United States $ 73 $ 96 $ 97 International 308 351 371 Total $ 381 $ 447 $ 468 97 | 2025 Form 10-K years ended December 31 (in millions) 2025 2024 2023 Other Neuroscience United States $ 192 $ 223 $ 254 International 15 16 19 Total $ 207 $ 239 $ 273 Oncology Imbruvica United States $ 2,048 $ 2,448 $ 2,665 Collaboration revenues 821 899 931 Total $ 2,869 $ 3,347 $ 3,596 Venclexta United States $ 1,306 $ 1,234 $ 1,087 International 1,486 1,349 1,201 Total $ 2,792 $ 2,583 $ 2,288 Elahere United States $ 607 $ 477 $ — International 83 2 — Total $ 690 $ 479 $ — Epkinly Collaboration revenues $ 181 $ 118 $ 28 International 90 28 3 Total $ 271 $ 146 $ 31 Other Oncology United States $ 33 $ — $ — Aesthetics Botox Cosmetic United States $ 1,504 $ 1,682 $ 1,670 International 1,098 1,038 1,012 Total $ 2,602 $ 2,720 $ 2,682 Juvederm Collection United States $ 385 $ 469 $ 519 International 608 708 859 Total $ 993 $ 1,177 $ 1,378 Other Aesthetics United States $ 1,101 $ 1,118 $ 1,060 International 164 161 174 Total $ 1,265 $ 1,279 $ 1,234 Eye Care Ozurdex United States $ 124 $ 138 $ 143 International 369 356 329 Total $ 493 $ 494 $ 472 Lumigan/Ganfort United States $ 189 $ 187 $ 173 International 221 242 259 Total $ 410 $ 429 $ 432 Alphagan/Combigan United States $ 53 $ 95 $ 121 International 144 153 151 Total $ 197 $ 248 $ 272 Other Eye Care United States $ 588 $ 644 $ 815 International 421 427 424 Total $ 1,009 $ 1,071 $ 1,239 Other Key Products Mavyret United States $ 635 $ 595 $ 659 International 682 716 771 Total $ 1,317 $ 1,311 $ 1,430 Creon United States $ 1,512 $ 1,383 $ 1,268 Linzess/Constella United States $ 864 $ 916 $ 1,073 International 43 38 35 Total $ 907 $ 954 $ 1,108 All other $ 2,627 $ 3,032 $ 3,035 Total net revenues $ 61,160 $ 56,334 $ 54,318 Net revenues to external customers by geographic area, based on product shipm 2025 Form 10-K | 98 ent destination, were as follows: years ended December 31 (in millions) 2025 2024 2023 United States $ 46,603 $ 43,029 $ 41,883 Germany 1,738 1,465 1,266 Japan 1,274 1,122 1,008 Canada 1,222 1,088 1,076 China 1,006 917 950 France 806 776 780 United Kingdom 626 522 417 Spain 609 528 501 Italy 580 511 484 Brazil 478 464 439 Australia 459 463 472 All other countries 5,759 5,449 5,042 Total net revenues $ 61,160 $ 56,334 $ 54,318 See the following for additional information about certain income and expenses included in net earnings: intangible assets amortization expense (Note 7), intangible assets impairment expense (Note 7), change in fair value of contingent consideration (Note 11), interest income and expense (Note 3), depreciation expense (Note 2), litigation matters (Note 15), income tax expense (Note 14) and restructuring expense (Note 8). Long-lived assets, consisting of property and equipment, net, by geographic area were as follows: as of December 31 (in millions) 2025 2024 United States $ 3,404 $ 3,331 Europe 1,804 1,485 All other 420 318 Total long-lived assets $ 5,628 $ 5,134 Note 17 Fourth Quarter Financial Results (unaudited) quarter ended December 31 (in millions except per share data) 2025 Net revenues $ 16,618 Gross margin 12,066 Net earnings attributable to AbbVie Inc. 1,816 Basic earnings per share attributable to AbbVie Inc. $ 1.02 Diluted earnings per share attributable to AbbVie Inc. $ 1.02 Cash dividends declared per common share $ 1.73 99 | 2025 Form 10-K Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of AbbVie Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of AbbVie Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, equity (deficit) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 2025 Form 10-K | 100 Sales rebate accruals for Medicaid, Medicare and managed care programs Description of the Matter As discussed in Note 2 to the consolidated financial statements under the caption “Revenue Recognition,” the Company established provisions for sales rebates in the same period the related product is sold. At December 31, 2025, the Company had $ 14,572 million in sales rebate accruals, a large portion of which were for rebates accrued for pharmacy benefit managers, state government Medicaid programs, insurance companies that administer Medicare drug plans and private entities for Medicaid, Medicare and managed care programs. In order to establish the rebate accruals, the Company estimated its rebates based on estimates and assumptions, including the determination of the related payer of the rebate based on sales trends, changes in rebate contracts which impacts the applicable price and rebate terms, and the corresponding lag in payment timing. Auditing the Medicaid, Medicare and managed care sales rebate accruals was complex and required significant auditor judgment because the accruals consider multiple subjective and complex estimates and assumptions. In deriving these estimates and assumptions, the Company used both internal and external sources of information. Management supplemented its historical data analysis with qualitative adjustments based upon changes in rebate trends, rebate programs, contract terms, legislative changes, or other significant events which indicate a change in the reserve is appropriate. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s sales rebate accruals for Medicaid, Medicare and managed care programs. This included testing controls over management’s review of the significant assumptions and other inputs used in the estimation of Medicaid, Medicare and managed care rebates, among others, including the significant assumptions discussed above. Specifically, we tested management’s controls to evaluate the sufficiency of its reserve estimates by comparing to actual rebates paid, controls over rebate validation and processing, and controls to ensure that the data used to evaluate and support the significant assumptions was complete and accurate. To test the sales rebate accruals and assess the historical accuracy of management's estimate for Medicaid, Medicare and managed care programs, our audit procedures included independently calculating the sales rebate accruals based on historical payments and performing a hindsight analysis on the reserves recorded. Our testing of significant assumptions included corroborating management's estimate of the rebate claims processing lag time for each type of rebate. We evaluated the reasonableness of assumptions considering industry and economic trends, product profiles, and other regulatory factors. For Medicaid, we involved a specialist with an understanding of statutory reimbursement requirements to assess the consistency of the Company’s calculation methodologies with applicable government regulations and policy. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2013. Chicago, Illinois February 20, 2026 101 | 2025 Form 10-K ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.