(MARK ONE)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2017
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Delaware
(State or other jurisdiction of
incorporation or organization)
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32-0375147
(I.R.S. employer
identification number)
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1 North Waukegan Road
North Chicago, Illinois 60064-6400
(Address of principal executive offices) (Zip Code)
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(847) 932-7900
(Telephone number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
Chicago Stock Exchange
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Large Accelerated Filer
x
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Accelerated Filer
o
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Non-accelerated Filer
o
(Do not check if a
smaller reporting company)
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Smaller Reporting Company
o
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Emerging Growth Company
o
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Page No.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Condition
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Principal Markets
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Rheumatoid arthritis (moderate to severe)
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North America, European Union
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Psoriatic arthritis
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North America, European Union
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Ankylosing spondylitis
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North America, European Union
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Adult Crohn's disease (moderate to severe)
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North America, European Union
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Plaque psoriasis (moderate to severe chronic)
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North America, European Union
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Juvenile idiopathic arthritis (moderate to severe polyarticular)
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North America, European Union
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Ulcerative colitis (moderate to severe)
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North America, European Union
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Axial spondyloarthropathy
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European Union
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Pediatric Crohn's disease (moderate to severe)
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North America, European Union
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Hidradenitis Suppurativa (moderate to severe)
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North America, European Union
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Pediatric enthesitis-related arthritis
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European Union
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Non-infectious intermediate, posterior and panuveitis
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North America, European Union
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(1)
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As used throughout the text of this report on Form 10-K, the terms "AbbVie" or "the company" refer to AbbVie Inc., a Delaware corporation, or AbbVie Inc. and its consolidated subsidiaries, as the context requires.
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2017 Form 10-K
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1
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•
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Chronic lymphocytic leukemia (CLL)/Small lymphocytic lymphoma (SLL) and CLL/SLL with 17p deletion;
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•
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Mantle cell lymphoma (MCL) who have received at least one prior therapy*;
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•
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Waldenström’s macroglobulinemia (WM);
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•
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Marginal zone lymphoma (MZL) who require systemic therapy and have received at least one prior anti-CD20-based therapy*; and
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•
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Chronic graft versus host disease (cGVHD) after failure of one or more lines of systemic therapy.
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2
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2017 Form 10-K
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2017 Form 10-K
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3
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4
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2017 Form 10-K
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2017 Form 10-K
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5
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•
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Phase 1—involves the first human tests in a small number of healthy volunteers or patients to assess safety, tolerability and potential dosing.
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•
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Phase 2—tests the drug's efficacy against the disease in a relatively small group of patients.
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6
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2017 Form 10-K
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•
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Phase 3—tests a drug that demonstrates favorable results in the earlier phases in a significantly larger patient population to further demonstrate efficacy and safety based on regulatory criteria.
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2017 Form 10-K
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7
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8
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2017 Form 10-K
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2017 Form 10-K
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9
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10
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2017 Form 10-K
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2017 Form 10-K
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11
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12
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2017 Form 10-K
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2017 Form 10-K
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13
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14
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2017 Form 10-K
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2017 Form 10-K
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15
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•
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fluctuations in currency exchange rates;
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•
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changes in medical reimbursement policies and programs;
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•
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multiple legal and regulatory requirements that are subject to change and that could restrict AbbVie's ability to manufacture, market and sell its products;
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•
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differing local product preferences and product requirements;
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trade protection measures and import or export licensing requirements;
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•
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difficulty in establishing, staffing and managing operations;
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•
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differing labor regulations;
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•
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potentially negative consequences from changes in or interpretations of tax laws;
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political and economic instability, including sovereign debt issues;
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price and currency exchange controls, limitations on participation in local enterprises, expropriation, nationalization and other governmental action;
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inflation, recession and fluctuations in interest rates;
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•
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potential deterioration in the economic position and credit quality of certain non-U.S. countries, including in Europe and Latin America; and
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•
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potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery and other similar laws and regulations, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act.
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16
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2017 Form 10-K
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2017 Form 10-K
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17
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•
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changes in or interpretations of laws and regulations, including changes in accounting standards, taxation requirements, product marketing application standards and environmental laws;
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•
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differences between the fair value measurement of assets and liabilities and their actual value, particularly for pension and post-employment benefits, stock-based compensation, intangibles and goodwill; and for contingent liabilities such as litigation and contingent consideration, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount;
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•
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changes in the rate of inflation (including the cost of raw materials, commodities and supplies), interest rates, market value of AbbVie's equity investments and the performance of investments held by it or its employee benefit trusts;
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changes in the creditworthiness of counterparties that transact business with or provide services to AbbVie or its employee benefit trusts;
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•
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changes in the ability of third parties that provide information technology, accounting, human resources, payroll and other outsourced services to AbbVie to meet their contractual obligations to AbbVie; and
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•
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changes in business, economic and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and pressure from third-party interest groups.
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18
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2017 Form 10-K
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•
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the inability of AbbVie's stockholders to call a special meeting;
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the division of AbbVie's board of directors into three classes of directors, with each class serving a staggered three-year term;
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a provision that stockholders may only remove directors for cause;
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the ability of AbbVie's directors, and not stockholders, to fill vacancies on AbbVie's board of directors; and
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the requirement that the affirmative vote of stockholders holding at least 80% of AbbVie's voting stock is required to amend certain provisions in AbbVie's amended and restated certificate of incorporation and AbbVie's amended and restated by-laws relating to the number, term and election of AbbVie's directors, the filling of board vacancies, the calling of special meetings of stockholders and director and officer indemnification provisions.
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2017 Form 10-K
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19
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United States
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Outside the United States
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Abbott Park, Illinois*
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Campoverde di Aprilia, Italy
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Barceloneta, Puerto Rico
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Cork, Ireland
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Jayuya, Puerto Rico
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Ludwigshafen, Germany
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North Chicago, Illinois
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Singapore*
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Worcester, Massachusetts*
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Sligo, Ireland
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Wyandotte, Michigan*
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*
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Leased property.
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20
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2017 Form 10-K
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2017 Form 10-K
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21
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Name
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Age
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Position
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Richard A. Gonzalez
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64
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Chairman of the Board and Chief Executive Officer
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Carlos Alban
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55
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Executive Vice President, Commercial Operations
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William J. Chase
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50
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Executive Vice President, Chief Financial Officer
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Henry O. Gosebruch*
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45
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Executive Vice President and Chief Strategy Officer
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Laura J. Schumacher
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54
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Executive Vice President, External Affairs, General Counsel and Corporate Secretary
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Michael E. Severino, M.D.*
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52
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Executive Vice President, Research and Development and Chief Scientific Officer
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Timothy J. Richmond
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51
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Senior Vice President, Human Resources
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Azita Saleki-Gerhardt, Ph.D.
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54
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Senior Vice President, Operations
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Robert A. Michael*
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47
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Vice President, Controller
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*
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Mr. Gosebruch was first appointed as a corporate officer in December 2015; Dr. Severino was first appointed as a corporate officer in June 2014; and Mr. Michael was first appointed as a corporate officer in December 2015.
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22
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2017 Form 10-K
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2017 Form 10-K
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23
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Market Price Per Share
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||||
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2017
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2016
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High
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Low
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High
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Low
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First Quarter
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$66.79
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$59.27
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$59.81
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$50.71
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Second Quarter
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$73.67
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$63.12
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$65.37
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$56.36
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Third Quarter
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$90.95
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$69.38
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$68.12
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$61.77
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Fourth Quarter
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$99.10
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$85.24
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$65.05
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$55.06
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2017
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2016
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Date Declared
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Payment Date
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Dividend Per Share
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Date Declared
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Payment Date
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Dividend Per Share
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10/27/17
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02/15/18
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$0.71
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10/28/16
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02/15/17
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$0.64
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09/08/17
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11/15/17
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$0.64
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09/09/16
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11/15/16
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$0.57
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06/22/17
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08/15/17
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$0.64
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06/16/16
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08/15/16
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$0.57
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02/16/17
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05/15/17
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$0.64
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02/18/16
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05/16/16
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$0.57
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24
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2017 Form 10-K
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Period
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(a) Total
Number
of Shares
(or Units)
Purchased
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(b) Average
Price
Paid per Share
(or Unit)
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(c) Total
Number of
Shares (or Units)
Purchased as Part
of Publicly
Announced
Plans or
Programs
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(d) Maximum Number (or
Approximate Dollar Value) of
Shares (or Units) that May
Yet Be Purchased Under the
Plans or Programs
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||||||
October 1, 2017 - October 31, 2017
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8,469
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(1)
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$
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94.35
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—
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$
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4,536,288,945
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November 1, 2017 - November 30, 2017
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5,279,237
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(1)
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$
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94.76
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5,276,274
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$
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4,036,289,077
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December 1, 2017 - December 31, 2017
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20,588
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(1)
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$
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97.85
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—
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$
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4,036,289,077
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Total
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5,308,294
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(1)
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94.77
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5,276,274
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$
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4,036,289,077
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1.
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In addition to AbbVie shares repurchased on the open market under a publicly announced program, if any, these shares included the shares deemed surrendered to AbbVie to pay the exercise price in connection with the exercise of employee stock options –
4,552
in October;
1,855
in November; and
5,368
in December, with average exercise prices of
$95.96
in October;
$93.36
in November; and
$97.33
in December.
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2017 Form 10-K
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25
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26
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2017 Form 10-K
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as of and for the years ended December 31 (in millions, except per share data)
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2017
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2016
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2015
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2014
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2013
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||||||||||
Statement of earnings data
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Net revenues
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$
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28,216
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$
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25,638
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$
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22,859
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$
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19,960
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$
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18,790
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Net earnings
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5,309
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5,953
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5,144
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1,774
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4,128
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|||||
Basic earnings per share
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$
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3.31
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$
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3.65
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$
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3.15
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$
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1.11
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$
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2.58
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Diluted earnings per share
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$
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3.30
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$
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3.63
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$
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3.13
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$
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1.10
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$
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2.56
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Cash dividends declared per common share
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$
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2.63
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$
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2.35
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$
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2.10
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$
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1.75
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$
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2.00
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(a)
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Weighted-average basic shares outstanding
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1,596
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1,622
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1,625
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1,595
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1,589
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Weighted-average diluted shares outstanding
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1,603
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1,631
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1,637
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1,610
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1,604
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Balance sheet data
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||||||||||
Total assets
(b)(c)
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$
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70,786
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$
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66,099
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$
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53,050
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$
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27,513
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$
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29,241
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Long-term debt and lease obligations
(b)(c)(d)
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36,968
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36,465
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31,265
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14,552
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14,353
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(a)
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AbbVie declared regular quarterly cash dividends in 2013 aggregating $1.60 per share of common stock. In addition, a cash dividend of $0.40 per share of common stock was declared from pre-separation earnings on January 4, 2013 and was recorded as a reduction of additional paid-in capital.
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(b)
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In May 2015, AbbVie acquired Pharmacyclics for approximately
$20.8 billion
, including cash consideration of
$12.4 billion
and equity consideration of approximately
128 million
shares of AbbVie common stock valued at
$8.4 billion
. In connection with the acquisition, AbbVie issued
$16.7 billion
aggregate principal amount of unsecured senior notes, of which approximately
$11.5 billion
was used to finance the acquisition and approximately
$5.0 billion
was used to finance an accelerated share repurchase (ASR) program. See
Note 5
to the
Consolidated Financial Statements
for information regarding the acquisition of Pharmacyclics,
Note 9
for information on the senior notes and
Note 12
for information on the ASR.
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(c)
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In June 2016, AbbVie acquired Stemcentrx for approximately
$6.4 billion
, including cash consideration of
$1.9 billion
, equity consideration of approximately
62.4 million
shares of AbbVie common stock valued at
$3.9 billion
and contingent consideration of approximately
$620 million
. In connection with the acquisition, AbbVie issued
$7.8 billion
aggregate principal amount of unsecured senior notes. Of the
$7.7 billion
net proceeds, approximately
$1.9 billion
was used to finance the acquisition, approximately
$3.8 billion
was used to finance an ASR and approximately
$2.0 billion
was used to repay the company's outstanding term loan that was due to mature in November 2016. See
Note 5
to the
Consolidated Financial Statements
for information regarding the acquisition of Stemcentrx,
Note 9
for information on the senior notes and
Note 12
for information on the ASR.
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(d)
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Includes current portion of both long-term debt and lease obligations.
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2017 Form 10-K
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27
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28
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2017 Form 10-K
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•
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HUMIRA sales growth by driving biologic penetration across disease categories, maintaining market leadership and effectively managing biosimilar erosion.
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•
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IMBRUVICA revenue growth driven by increasing market share with its eight currently approved indications in six different disease areas.
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•
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The strong execution of new product launches, including MAVYRET.
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•
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The favorable impact of pipeline products approved in 2017 or currently under regulatory review where approval is expected in 2018. These products are described in greater detail in the section labeled "Research and Development" included as part of this
Item 7
.
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•
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In June 2017, AbbVie announced that top-line results from the Phase 3 SELECT-NEXT clinical trial evaluating upadacitinib (ABT-494), the company’s selective JAK1 inhibitor currently in late-stage development for rheumatoid arthritis (RA), met all primary and ranked secondary endpoints in patients with moderate to severe RA who did not adequately respond to treatment with conventional synthetic disease modifying anti-rheumatic drugs (DMARDs). The safety profile of upadacitinib was consistent with previously reported Phase 2 trials and no new safety signals were detected.
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•
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In September 2017, AbbVie announced that top-line results from the Phase 3 SELECT-BEYOND clinical trial evaluating upadacitinib met all primary and ranked secondary endpoints in patients with moderate to severe RA who did not adequately respond or were intolerant to treatment with biologic DMARDs. The safety profile of upadacitinib was consistent with previously reported Phase 2 trials and the Phase 3 SELECT-NEXT clinical trial, with no new safety signals detected.
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2017 Form 10-K
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29
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•
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In December 2017, AbbVie announced that top-line results from the Phase 3 SELECT-MONOTHERAPY clinical trial evaluating upadacitinib met all primary and key secondary endpoints in patients with moderate to severe RA who did not adequately respond to treatment with methotrexate. The safety profile of upadacitinib was consistent with previously reported Phase 3 SELECT clinical trials and Phase 2 trials, with no new safety signals detected.
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•
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In 2017, AbbVie initiated Phase 3 clinical trials to evaluate the safety and efficacy of upadacitinib in subjects with moderately to severely active Crohn’s disease and in subjects with moderately to severely active psoriatic arthritis.
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•
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In January 2018, the U.S. Food and Drug Administration (FDA) granted breakthrough therapy designation for upadacitinib in adult patients with moderate to severe atopic dermatitis who are candidates for systemic therapy.
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•
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In October 2017, AbbVie announced that top-line results from three Phase 3 clinical trials evaluating risankizumab, an investigational interleukin-23 (IL-23) inhibitor, with 12-week dosing compared to ustekinumab and adalimumab met all co-primary and ranked secondary endpoints for the treatment of patients with moderate to severe chronic plaque psoriasis. The safety profile was consistent with all previously reported studies, and there were no new safety signals detected across the three studies.
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•
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In December 2017, AbbVie announced that top-line results from the Phase 3 IMMhance clinical trial evaluating risankizumab at 16 weeks and 52 weeks of treatment compared to placebo met all primary and ranked secondary endpoints for the treatment of patients with moderate to severe plaque psoriasis. The safety profile was consistent with all previously reported Phase 3 studies, and there were no new safety signals detected across the Phase 3 program.
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•
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In December 2017, AbbVie initiated a Phase 3 clinical trial to evaluate the safety and efficacy of risankizumab in subjects with moderately to severely active Crohn’s disease.
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•
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In January 2017, the FDA approved IMBRUVICA for the treatment of patients with relapsed/refractory marginal zone lymphoma (MZL) who require systemic therapy and have received at least one prior anti-CD20-based therapy. This indication is approved under accelerated approval based on overall response rate (ORR) and continued approval may be contingent upon verification and description of clinical benefit in a confirmatory trial. MZL is a slow-growing form of non-Hodgkin's lymphoma.
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•
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In August 2017, the FDA approved IMBRUVICA for the treatment of adult patients with chronic graft-versus-host-disease (cGVHD) after failure of one or more lines of systemic therapy. IMBRUVICA is the first therapy specifically approved for adults with cGVHD, a severe and potentially life-threatening consequence of stem cell or bone marrow transplant. This marked the sixth U.S. disease indication for IMBRUVICA since the medication's initial approval in 2013 and the first approved indication outside of cancer.
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•
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In December 2017, AbbVie announced that the Phase 3 iNNOVATE clinical trial evaluating IMBRUVICA in combination with rituximab in patients with untreated (treatment-naïve) and previously-treated Waldenström’s macroglobulinemia (WM) met its primary endpoint. This is the first and only treatment approved for newly or previously-treated patients with WM.
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•
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In February 2017, AbbVie initiated a Phase 3 clinical trial to study the safety and efficacy of venetoclax in combination with azacitidine in treatment-naïve elderly subjects with acute myeloid leukemia (AML) who are ineligible for standard induction therapy (high-dose chemotherapy).
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30
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2017 Form 10-K
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|
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•
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In May 2017, AbbVie initiated a Phase 3 clinical trial to evaluate if venetoclax when co-administered with low dose cytarabine (LDAC) improves overall survival (OS) versus LDAC and placebo, in treatment naïve subjects with AML.
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•
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In September 2017, AbbVie announced that top-line results from the Phase 3 MURANO clinical trial evaluating venetoclax tablets in combination with Rituxan (rituximab) met the primary endpoint of prolonged progression-free survival compared with bendamustine in combination with Rituxan in patients with relapsed/refractory chronic lymphocytic leukemia (CLL).
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•
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In December 2017, AbbVie submitted a supplemental New Drug Application (sNDA) to the FDA for VENCLEXTA (venetoclax) in combination with Rituxan in patients with relapsed or refractory CLL and in January 2018, AbbVie submitted an sNDA for VENCLEXTA monotherapy in patients with CLL who have relapsed or are refractory to B-cell receptor inhibitors.
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•
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In February 2017, AbbVie initiated a Phase 3 clinical trial to evaluate the efficacy of rovalpituzumab tesirine (Rova-T) as maintenance therapy following first-line platinum based chemotherapy in participants with extensive stage small cell lung cancer (SCLC).
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•
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In April 2017, AbbVie initiated a Phase 3 clinical trial to evaluate Rova-T compared with topotecan for subjects with advanced or metastatic SCLC with high levels of delta-like protein 3 who have first disease progression during or following front-line platinum-based chemotherapy.
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•
|
In November 2017, AbbVie presented results from the INTELLANCE-2 trial, a potential registration-enabling Phase 2 study evaluating depatuxizumab mafodotin (ABT-414), an investigational, antibody drug conjugate (ADC) targeting epidermal growth factor receptor (EGFR) alone or in combination with temozolomide (TMZ) in subjects with recurrent glioblastoma multiforme (GBM). Results from the INTELLANCE-2 study failed to meet the primary endpoint of overall survival and AbbVie will not be submitting regulatory applications for ABT-414 in recurrent GBM. In INTELLANCE-2, the combination of ABT-414 and TMZ performed numerically better than lomustine or TMZ and a positive trend in overall survival was observed. While AbbVie will not file in recurrent GBM based on these data, the Phase 2/3 INTELLANCE-1 trial evaluating the safety and efficacy of ABT-414 in combination with TMZ in subjects with newly diagnosed GBM with EGFR amplification is ongoing.
|
•
|
In April 2017, AbbVie announced that two Phase 3 studies evaluating veliparib, an investigational, oral poly (adenosine diphosphate-ribose) polymerase (PARP) inhibitor in combination with chemotherapy did not meet their primary endpoints. The studies evaluated veliparib in combination with carboplatin and paclitaxel in patients with squamous non-small cell lung cancer (NSCLC) and triple negative breast cancer (TNBC). Ongoing Phase 3 studies include non-squamous non-small cell lung cancer, BRCA1/2 breast cancer and ovarian cancer.
|
•
|
In February 2017, the European Committee for Medicinal Products for Human Use (CHMP) granted a positive opinion for a shorter, eight-week treatment of VIEKIRAX (ombitasvir/paritaprevir/ritonavir tablets) + EXVIERA (dasabuvir tablets) as an option for previously untreated adult patients with genotype 1b chronic HCV and minimal to moderate fibrosis.
|
•
|
In July 2017, the European Commission granted marketing authorization for MAVIRET (glecaprevir/pibrentasvir), a once-daily, ribavirin-free treatment for adults with HCV infection across all major genotypes (GT1-6). MAVIRET is also indicated for patients with specific treatment challenges, including those with compensated cirrhosis across all major genotypes, and those who previously had limited treatment options, such as patients with severe chronic kidney disease (CKD) or those with genotype 3 chronic HCV infection.
|
•
|
In August 2017, the FDA approved MAVYRET (glecaprevir/pibrentasvir) for the treatment of patients with chronic HCV genotype 1-6 infection without cirrhosis and with compensated cirrhosis (Child-Pugh A). MAVYRET is also
|
|
|
2017 Form 10-K
|
31
|
•
|
In September 2017, AbbVie submitted a New Drug Application to the FDA for elagolix, an investigational, orally administered gonadotropin-releasing hormone (GnRH) antagonist, being evaluated for the management of endometriosis with associated pain. In October, AbbVie was granted priority review for elagolix by the FDA for the management of endometriosis with associated pain. In November, AbbVie announced detailed results from two replicate Phase 3 extension studies evaluating the long-term efficacy and safety of elagolix, being evaluated for the management of endometriosis with associated pain.
|
•
|
In December 2017, AbbVie announced the strategic decision to close the SONAR study, a Phase 3 clinical trial evaluating the effects of the investigational compound atrasentan on progression of kidney disease in patients with stage 2 to 4 chronic kidney disease and type 2 diabetes when added to standard of care. The ongoing monitoring of renal events observed in the study revealed considerably fewer endpoints than expected at the time of analysis, which will likely affect the ability to test the SONAR study hypothesis. Therefore, AbbVie determined that it cannot justify continuing the participation of patients in the study. The decision to close the SONAR study early was not related to any safety concerns.
|
32
|
2017 Form 10-K
|
|
|
|
|
|
|
|
|
|
Percent change
|
||||||||||||||||
|
|
|
|
|
|
|
At actual currency rates
|
|
At constant currency rates
|
||||||||||||||
Years ended December 31
(dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
HUMIRA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
12,361
|
|
|
$
|
10,432
|
|
|
$
|
8,405
|
|
|
18.5
|
%
|
|
24.1
|
%
|
|
18.5
|
%
|
|
24.1
|
%
|
International
|
6,066
|
|
|
5,646
|
|
|
5,607
|
|
|
7.4
|
%
|
|
0.7
|
%
|
|
6.7
|
%
|
|
4.3
|
%
|
|||
Total
|
$
|
18,427
|
|
|
$
|
16,078
|
|
|
$
|
14,012
|
|
|
14.6
|
%
|
|
14.7
|
%
|
|
14.4
|
%
|
|
16.1
|
%
|
IMBRUVICA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
2,144
|
|
|
$
|
1,580
|
|
|
$
|
659
|
|
|
35.8
|
%
|
|
>100.0
|
%
|
|
35.8
|
%
|
|
>100.0
|
%
|
Collaboration revenues
|
429
|
|
|
252
|
|
|
95
|
|
|
70.0
|
%
|
|
>100.0
|
%
|
|
70.0
|
%
|
|
>100.0
|
%
|
|||
Total
|
$
|
2,573
|
|
|
$
|
1,832
|
|
|
$
|
754
|
|
|
40.5
|
%
|
|
>100.0
|
%
|
|
40.5
|
%
|
|
>100.0
|
%
|
HCV
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
338
|
|
|
$
|
342
|
|
|
$
|
804
|
|
|
(1.4
|
)%
|
|
(57.4
|
)%
|
|
(1.4
|
)%
|
|
(57.4
|
)%
|
International
|
936
|
|
|
1,180
|
|
|
835
|
|
|
(20.6
|
)%
|
|
41.3
|
%
|
|
(20.5
|
)%
|
|
42.7
|
%
|
|||
Total
|
$
|
1,274
|
|
|
$
|
1,522
|
|
|
$
|
1,639
|
|
|
(16.3
|
)%
|
|
(7.1
|
)%
|
|
(16.2
|
)%
|
|
(6.4
|
)%
|
Lupron
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
669
|
|
|
$
|
663
|
|
|
$
|
653
|
|
|
0.8
|
%
|
|
1.5
|
%
|
|
0.8
|
%
|
|
1.5
|
%
|
International
|
160
|
|
|
158
|
|
|
173
|
|
|
1.4
|
%
|
|
(8.5
|
)%
|
|
0.5
|
%
|
|
(5.2
|
)%
|
|||
Total
|
$
|
829
|
|
|
$
|
821
|
|
|
$
|
826
|
|
|
0.9
|
%
|
|
(0.6
|
)%
|
|
0.7
|
%
|
|
0.1
|
%
|
Creon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
831
|
|
|
$
|
730
|
|
|
$
|
632
|
|
|
13.9
|
%
|
|
15.5
|
%
|
|
13.9
|
%
|
|
15.5
|
%
|
Synagis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
International
|
$
|
738
|
|
|
$
|
730
|
|
|
$
|
740
|
|
|
1.2
|
%
|
|
(1.5
|
)%
|
|
0.6
|
%
|
|
(0.4
|
)%
|
Synthroid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
781
|
|
|
$
|
763
|
|
|
$
|
755
|
|
|
2.3
|
%
|
|
1.1
|
%
|
|
2.3
|
%
|
|
1.1
|
%
|
AndroGel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
577
|
|
|
$
|
675
|
|
|
$
|
694
|
|
|
(14.5
|
)%
|
|
(2.8
|
)%
|
|
(14.5
|
)%
|
|
(2.8
|
)%
|
Kaletra
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
71
|
|
|
$
|
116
|
|
|
$
|
163
|
|
|
(38.6
|
)%
|
|
(28.8
|
)%
|
|
(38.6
|
)%
|
|
(28.8
|
)%
|
International
|
352
|
|
|
433
|
|
|
537
|
|
|
(18.8
|
)%
|
|
(19.3
|
)%
|
|
(21.1
|
)%
|
|
(13.3
|
)%
|
|||
Total
|
$
|
423
|
|
|
$
|
549
|
|
|
$
|
700
|
|
|
(22.9
|
)%
|
|
(21.5
|
)%
|
|
(24.7
|
)%
|
|
(16.9
|
)%
|
Sevoflurane
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
78
|
|
|
$
|
80
|
|
|
$
|
81
|
|
|
(2.1
|
)%
|
|
(1.0
|
)%
|
|
(2.1
|
)%
|
|
(1.0
|
)%
|
International
|
332
|
|
|
348
|
|
|
393
|
|
|
(4.6
|
)%
|
|
(11.4
|
)%
|
|
(3.7
|
)%
|
|
(6.9
|
)%
|
|||
Total
|
$
|
410
|
|
|
$
|
428
|
|
|
$
|
474
|
|
|
(4.1
|
)%
|
|
(9.7
|
)%
|
|
(3.4
|
)%
|
|
(6.0
|
)%
|
Duodopa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
$
|
61
|
|
|
$
|
37
|
|
|
$
|
12
|
|
|
66.1
|
%
|
|
>100.0
|
%
|
|
66.1
|
%
|
|
>100.0
|
%
|
International
|
294
|
|
|
256
|
|
|
219
|
|
|
14.6
|
%
|
|
16.9
|
%
|
|
13.1
|
%
|
|
18.1
|
%
|
|||
Total
|
$
|
355
|
|
|
$
|
293
|
|
|
$
|
231
|
|
|
21.1
|
%
|
|
26.9
|
%
|
|
19.8
|
%
|
|
28.1
|
%
|
All other
|
$
|
998
|
|
|
$
|
1,217
|
|
|
$
|
1,402
|
|
|
(18.0
|
)%
|
|
(13.2
|
)%
|
|
(18.2
|
)%
|
|
(12.3
|
)%
|
Total net revenues
|
$
|
28,216
|
|
|
$
|
25,638
|
|
|
$
|
22,859
|
|
|
10.1
|
%
|
|
12.2
|
%
|
|
9.8
|
%
|
|
13.5
|
%
|
|
|
2017 Form 10-K
|
33
|
34
|
2017 Form 10-K
|
|
|
|
|
|
|
|
|
|
Percent change
|
||||||||||
years ended December 31 (dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
||||||||
Selling, general and administrative
|
$
|
6,275
|
|
|
$
|
5,855
|
|
|
$
|
6,387
|
|
|
7
|
%
|
|
(8
|
)%
|
as a percent of net revenues
|
22
|
%
|
|
23
|
%
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Percent change
|
||||||||||
years ended December 31 (dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
||||||||
Research and development
|
$
|
4,982
|
|
|
$
|
4,366
|
|
|
$
|
4,285
|
|
|
14
|
%
|
|
2
|
%
|
as a percent of net revenues
|
18
|
%
|
|
17
|
%
|
|
19
|
%
|
|
|
|
|
|||||
Acquired in-process research and development
|
$
|
327
|
|
|
$
|
200
|
|
|
$
|
150
|
|
|
64
|
%
|
|
33
|
%
|
years ended December 31 (in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest expense
|
|
$
|
1,150
|
|
|
$
|
1,047
|
|
|
$
|
719
|
|
Interest income
|
|
(146
|
)
|
|
(82
|
)
|
|
(33
|
)
|
|||
Interest expense, net
|
|
$
|
1,004
|
|
|
$
|
965
|
|
|
$
|
686
|
|
|
|
|
|
|
|
|
||||||
Net foreign exchange loss
|
|
$
|
348
|
|
|
$
|
303
|
|
|
$
|
193
|
|
Other expense, net
|
|
513
|
|
|
232
|
|
|
13
|
|
|
|
2017 Form 10-K
|
35
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
9,960
|
|
|
$
|
7,041
|
|
|
$
|
7,535
|
|
Investing activities
|
(274
|
)
|
|
(6,074
|
)
|
|
(12,936
|
)
|
|||
Financing activities
|
(5,512
|
)
|
|
(3,928
|
)
|
|
5,752
|
|
36
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
37
|
38
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
39
|
(in millions)
|
Total
|
|
Less than
one year
|
|
One to
three years
|
|
Three to
five years
|
|
More than
five years
|
||||||||||
Short-term borrowings
|
$
|
400
|
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt and capital lease obligations, including current portion
|
37,612
|
|
|
6,026
|
|
|
5,469
|
|
|
5,938
|
|
|
20,179
|
|
|||||
Interest on long-term debt
(a)
|
15,617
|
|
|
1,154
|
|
|
2,250
|
|
|
2,080
|
|
|
10,133
|
|
|||||
Future minimum non-cancelable operating lease commitments
|
957
|
|
|
143
|
|
|
235
|
|
|
151
|
|
|
428
|
|
|||||
Purchase obligations and other
(b)
|
1,135
|
|
|
972
|
|
|
115
|
|
|
46
|
|
|
2
|
|
|||||
Other long-term liabilities
(c) (d) (e) (f)
|
10,605
|
|
|
1,135
|
|
|
1,610
|
|
|
1,331
|
|
|
6,529
|
|
|||||
Total
|
$
|
66,326
|
|
|
$
|
9,830
|
|
|
$
|
9,679
|
|
|
$
|
9,546
|
|
|
$
|
37,271
|
|
(a)
|
Includes estimated future interest payments on long-term debt and capital lease obligations. Interest payments on debt are calculated for future periods using forecasted interest rates in effect at the end of
2017
. Projected interest payments include the related effects of interest rate swap agreements. Certain of these projected interest payments may differ in the future based on changes in floating interest rates or other factors or events. The projected interest payments only pertain to obligations and agreements outstanding at
December 31, 2017
. See
Note 9
to the
Consolidated Financial Statements
for additional information regarding the company's debt instruments and
Note 10
for additional information on the interest rate swap agreements outstanding at
December 31, 2017
.
|
(b)
|
Includes the company's significant unconditional purchase obligations. These commitments do not exceed the company's projected requirements and are made in the normal course of business.
|
(c)
|
Amounts less than one year includes voluntary contributions in excess of
$750 million
that AbbVie plans to make to its various defined benefit plans subsequent to December 31,
2017
. Amounts otherwise exclude pension and other post-employment benefits and related deferred compensation cash outflows. Timing of funding is uncertain and dependent on future movements in interest rates and investment returns, changes in laws and regulations and other variables. Also included in this amount are components of other long-term liabilities including restructuring. See
Note 8
to the
Consolidated Financial Statements
for additional information on restructuring and
Note 11
for additional information on the pension and other post-employment benefit plans.
|
(d)
|
Excludes liabilities associated with the company's unrecognized tax benefits as it is not possible to reliably estimate the timing of the future cash outflows related to these liabilities. See
Note 13
to the
Consolidated Financial Statements
for additional information on these unrecognized tax benefits.
|
(e)
|
Includes
$4.5 billion
of contingent consideration liabilities related to the acquisitions of Stemcentrx and BI compounds which are recorded at fair value on the consolidated balance sheet. Potential contingent consideration payments that exceed the fair value recorded on the consolidated balance sheet are not included in the table of contractual obligations. See Notes
5
and
10
to the
Consolidated Financial Statements
for additional information regarding these liabilities.
|
(f)
|
Includes a one-time transition tax liability on a mandatory deemed repatriation of previously untaxed earnings of foreign subsidiaries resulting from U.S. tax reform, enacted in 2017. The one-time transition tax is generally payable in eight annual installments. See Note 13 to the
Consolidated Financial Statements
for additional information regarding the provisional estimates of these tax liabilities.
|
40
|
2017 Form 10-K
|
|
|
(in millions)
|
Medicaid
and
Medicare
Rebates
|
|
Managed
Care
Rebates
|
|
Wholesaler
Chargebacks
|
||||||
Balance at December 31, 2014
|
$
|
712
|
|
|
$
|
476
|
|
|
$
|
253
|
|
Provisions
|
1,716
|
|
|
2,215
|
|
|
3,866
|
|
|||
Payments
|
(1,396
|
)
|
|
(1,771
|
)
|
|
(3,756
|
)
|
|||
Balance at December 31, 2015
|
1,032
|
|
|
920
|
|
|
363
|
|
|||
Provisions
|
2,606
|
|
|
3,146
|
|
|
3,987
|
|
|||
Payments
|
(2,471
|
)
|
|
(2,899
|
)
|
|
(3,967
|
)
|
|||
Balance at December 31, 2016
|
1,167
|
|
|
1,167
|
|
|
383
|
|
|||
Provisions
|
2,909
|
|
|
3,990
|
|
|
5,026
|
|
|||
Payments
|
(2,736
|
)
|
|
(3,962
|
)
|
|
(4,887
|
)
|
|||
Balance at December 31, 2017
|
$
|
1,340
|
|
|
$
|
1,195
|
|
|
$
|
522
|
|
|
|
2017 Form 10-K
|
41
|
|
50 basis point
|
||||||
(in millions) (brackets denote a reduction)
|
Increase
|
|
Decrease
|
||||
Defined benefit plans
|
|
|
|
||||
Service and interest cost
|
$
|
(64
|
)
|
|
$
|
72
|
|
Projected benefit obligation
|
(572
|
)
|
|
652
|
|
||
Other post-employment plans
|
|
|
|
||||
Service and interest cost
|
$
|
(9
|
)
|
|
$
|
11
|
|
Projected benefit obligation
|
(77
|
)
|
|
89
|
|
42
|
2017 Form 10-K
|
|
|
|
One percentage point
|
||||||
(in millions) (brackets denote a reduction)
|
Increase
|
|
Decrease
|
||||
Service and interest cost
|
$
|
31
|
|
|
$
|
(24
|
)
|
Projected benefit obligation
|
183
|
|
|
(140
|
)
|
|
|
2017 Form 10-K
|
43
|
44
|
2017 Form 10-K
|
|
|
|
|
2017
|
|
2016
|
||||||||||||||||||
(in millions)
|
Contract
amount
|
|
Weighted
average
exchange
rate
|
|
Fair and
carrying
value
receivable/(payable)
|
|
Contract
amount
|
|
Weighted
average
exchange
rate
|
|
Fair and
carrying
value
receivable
|
||||||||||
Receive primarily U.S. dollars in exchange for the following currencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Euro
|
$
|
6,366
|
|
|
1.175
|
|
|
$
|
(88
|
)
|
|
$
|
5,544
|
|
|
1.078
|
|
|
$
|
102
|
|
Japanese yen
|
940
|
|
|
112.4
|
|
|
2
|
|
|
935
|
|
|
111.6
|
|
|
39
|
|
||||
British pound
|
760
|
|
|
1.310
|
|
|
(22
|
)
|
|
611
|
|
|
1.303
|
|
|
35
|
|
||||
All other currencies
|
1,877
|
|
|
n/a
|
|
|
(18
|
)
|
|
1,693
|
|
|
n/a
|
|
|
11
|
|
||||
Total
|
$
|
9,943
|
|
|
|
|
$
|
(126
|
)
|
|
$
|
8,783
|
|
|
|
|
$
|
187
|
|
|
|
2017 Form 10-K
|
45
|
46
|
2017 Form 10-K
|
|
|
|
|
|
2017 Form 10-K
|
47
|
years ended December 31 (in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues
|
$
|
28,216
|
|
|
$
|
25,638
|
|
|
$
|
22,859
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
7,040
|
|
|
5,833
|
|
|
4,500
|
|
|||
Selling, general and administrative
|
6,275
|
|
|
5,855
|
|
|
6,387
|
|
|||
Research and development
|
4,982
|
|
|
4,366
|
|
|
4,285
|
|
|||
Acquired in-process research and development
|
327
|
|
|
200
|
|
|
150
|
|
|||
Total operating costs and expenses
|
18,624
|
|
|
16,254
|
|
|
15,322
|
|
|||
Operating earnings
|
9,592
|
|
|
9,384
|
|
|
7,537
|
|
|||
|
|
|
|
|
|
||||||
Interest expense, net
|
1,004
|
|
|
965
|
|
|
686
|
|
|||
Net foreign exchange loss
|
348
|
|
|
303
|
|
|
193
|
|
|||
Other expense, net
|
513
|
|
|
232
|
|
|
13
|
|
|||
Earnings before income tax expense
|
7,727
|
|
|
7,884
|
|
|
6,645
|
|
|||
Income tax expense
|
2,418
|
|
|
1,931
|
|
|
1,501
|
|
|||
Net earnings
|
$
|
5,309
|
|
|
$
|
5,953
|
|
|
$
|
5,144
|
|
|
|
|
|
|
|
||||||
Per share data
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
3.31
|
|
|
$
|
3.65
|
|
|
$
|
3.15
|
|
Diluted earnings per share
|
$
|
3.30
|
|
|
$
|
3.63
|
|
|
$
|
3.13
|
|
Cash dividends declared per common share
|
$
|
2.63
|
|
|
$
|
2.35
|
|
|
$
|
2.10
|
|
|
|
|
|
|
|
||||||
Weighted-average basic shares outstanding
|
1,596
|
|
|
1,622
|
|
|
1,625
|
|
|||
Weighted-average diluted shares outstanding
|
1,603
|
|
|
1,631
|
|
|
1,637
|
|
48
|
2017 Form 10-K
|
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net earnings
|
$
|
5,309
|
|
|
$
|
5,953
|
|
|
$
|
5,144
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of tax expense (benefit) of $34 in 2017, $(31) in 2016 and $(139) in 2015
|
996
|
|
|
(165
|
)
|
|
(667
|
)
|
|||
Net investment hedging activities, net of tax expense (benefit) of $(194) in 2017, $79 in 2016 and $— in 2015
|
(343
|
)
|
|
140
|
|
|
—
|
|
|||
Pension and post-employment benefits, net of tax expense (benefit) of $(94) in 2017, $(75) in 2016 and $96 in 2015
|
(406
|
)
|
|
(135
|
)
|
|
230
|
|
|||
Marketable security activities, net of tax expense (benefit) of $(8) in 2017, $(11) in 2016 and $22 in 2015
|
(46
|
)
|
|
(1
|
)
|
|
44
|
|
|||
Cash flow hedging activities, net of tax expense (benefit) of $(26) in 2017, $18 in 2016 and $(6) in 2015
|
(342
|
)
|
|
136
|
|
|
(137
|
)
|
|||
Other comprehensive loss
|
(141
|
)
|
|
(25
|
)
|
|
(530
|
)
|
|||
Comprehensive income
|
$
|
5,168
|
|
|
$
|
5,928
|
|
|
$
|
4,614
|
|
|
|
2017 Form 10-K
|
49
|
as of December 31 (in millions, except share data)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and equivalents
|
$
|
9,303
|
|
|
$
|
5,100
|
|
Short-term investments
|
486
|
|
|
1,323
|
|
||
Accounts receivable, net
|
5,088
|
|
|
4,758
|
|
||
Inventories
|
1,605
|
|
|
1,444
|
|
||
Prepaid expenses and other
|
4,741
|
|
|
3,562
|
|
||
Total current assets
|
21,223
|
|
|
16,187
|
|
||
|
|
|
|
||||
Investments
|
2,090
|
|
|
1,783
|
|
||
Property and equipment, net
|
2,803
|
|
|
2,604
|
|
||
Intangible assets, net
|
27,559
|
|
|
28,897
|
|
||
Goodwill
|
15,785
|
|
|
15,416
|
|
||
Other assets
|
1,326
|
|
|
1,212
|
|
||
Total assets
|
$
|
70,786
|
|
|
$
|
66,099
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
400
|
|
|
$
|
377
|
|
Current portion of long-term debt and lease obligations
|
6,015
|
|
|
25
|
|
||
Accounts payable and accrued liabilities
|
10,226
|
|
|
9,379
|
|
||
Total current liabilities
|
16,641
|
|
|
9,781
|
|
||
|
|
|
|
||||
Long-term debt and lease obligations
|
30,953
|
|
|
36,440
|
|
||
Deferred income taxes
|
2,490
|
|
|
6,890
|
|
||
Other long-term liabilities
|
15,605
|
|
|
8,352
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,768,738,550 shares issued as of December 31, 2017 and 1,754,900,486 as of December 31, 2016
|
18
|
|
|
18
|
|
||
Common stock held in treasury, at cost, 176,607,525 shares as of December 31, 2017 and 162,387,762 as of December 31, 2016
|
(11,923
|
)
|
|
(10,852
|
)
|
||
Additional paid-in-capital
|
14,270
|
|
|
13,678
|
|
||
Retained earnings
|
5,459
|
|
|
4,378
|
|
||
Accumulated other comprehensive loss
|
(2,727
|
)
|
|
(2,586
|
)
|
||
Total stockholders’ equity
|
5,097
|
|
|
4,636
|
|
||
|
|
|
|
||||
Total liabilities and equity
|
$
|
70,786
|
|
|
$
|
66,099
|
|
50
|
2017 Form 10-K
|
|
|
years ended December 31 (in millions)
|
Common
shares
outstanding
|
|
Common
stock
|
|
Treasury
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
loss
|
|
Total
|
|||||||||||||
Balance at December 31, 2014
|
1,591
|
|
|
$
|
16
|
|
|
$
|
(972
|
)
|
|
$
|
4,194
|
|
|
$
|
535
|
|
|
$
|
(2,031
|
)
|
|
$
|
1,742
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,144
|
|
|
—
|
|
|
5,144
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(530
|
)
|
|
(530
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,431
|
)
|
|
—
|
|
|
(3,431
|
)
|
||||||
Common shares issued to Pharmacyclics stockholders
|
128
|
|
|
1
|
|
|
—
|
|
|
8,404
|
|
|
—
|
|
|
—
|
|
|
8,405
|
|
||||||
Purchases of treasury stock
|
(119
|
)
|
|
—
|
|
|
(7,886
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,886
|
)
|
||||||
Stock-based compensation plans and other
|
10
|
|
|
—
|
|
|
19
|
|
|
482
|
|
|
—
|
|
|
—
|
|
|
501
|
|
||||||
Balance at December 31, 2015
|
1,610
|
|
|
17
|
|
|
(8,839
|
)
|
|
13,080
|
|
|
2,248
|
|
|
(2,561
|
)
|
|
3,945
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,953
|
|
|
—
|
|
|
5,953
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,823
|
)
|
|
—
|
|
|
(3,823
|
)
|
||||||
Common shares issued to Stemcentrx stockholders
|
63
|
|
|
—
|
|
|
3,958
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
3,923
|
|
||||||
Purchases of treasury stock
|
(94
|
)
|
|
—
|
|
|
(6,018
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,018
|
)
|
||||||
Stock-based compensation plans and other
|
14
|
|
|
1
|
|
|
47
|
|
|
633
|
|
|
—
|
|
|
—
|
|
|
681
|
|
||||||
Balance at December 31, 2016
|
1,593
|
|
|
18
|
|
|
(10,852
|
)
|
|
13,678
|
|
|
4,378
|
|
|
(2,586
|
)
|
|
4,636
|
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,309
|
|
|
—
|
|
|
5,309
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
(141
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,221
|
)
|
|
—
|
|
|
(4,221
|
)
|
||||||
Purchases of treasury stock
|
(15
|
)
|
|
—
|
|
|
(1,125
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,125
|
)
|
||||||
Stock-based compensation plans and other
|
14
|
|
|
—
|
|
|
54
|
|
|
592
|
|
|
(7
|
)
|
|
—
|
|
|
639
|
|
||||||
Balance at December 31, 2017
|
1,592
|
|
|
$
|
18
|
|
|
$
|
(11,923
|
)
|
|
$
|
14,270
|
|
|
$
|
5,459
|
|
|
$
|
(2,727
|
)
|
|
$
|
5,097
|
|
|
|
2017 Form 10-K
|
51
|
years ended December 31 (in millions) (brackets denote cash outflows)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
5,309
|
|
|
$
|
5,953
|
|
|
$
|
5,144
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
425
|
|
|
425
|
|
|
417
|
|
|||
Amortization of intangible assets
|
1,076
|
|
|
764
|
|
|
419
|
|
|||
Change in fair value of contingent consideration liabilities
|
626
|
|
|
228
|
|
|
—
|
|
|||
Stock-based compensation
|
365
|
|
|
353
|
|
|
282
|
|
|||
Upfront costs and milestones related to collaborations
|
470
|
|
|
280
|
|
|
280
|
|
|||
Devaluation loss related to Venezuela
|
—
|
|
|
298
|
|
|
—
|
|
|||
Intangible asset impairment
|
354
|
|
|
39
|
|
|
—
|
|
|||
Impacts related to U.S. tax reform
|
1,242
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
84
|
|
|
390
|
|
|
489
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(391
|
)
|
|
(71
|
)
|
|
(1,076
|
)
|
|||
Inventories
|
93
|
|
|
(38
|
)
|
|
(434
|
)
|
|||
Prepaid expenses and other assets
|
(118
|
)
|
|
(393
|
)
|
|
511
|
|
|||
Accounts payable and other liabilities
|
425
|
|
|
(1,187
|
)
|
|
1,503
|
|
|||
Cash flows from operating activities
|
9,960
|
|
|
7,041
|
|
|
7,535
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(2,495
|
)
|
|
(11,488
|
)
|
|||
Other acquisitions and investments
|
(308
|
)
|
|
(262
|
)
|
|
(964
|
)
|
|||
Acquisitions of property and equipment
|
(529
|
)
|
|
(479
|
)
|
|
(532
|
)
|
|||
Purchases of investment securities
|
(2,230
|
)
|
|
(5,315
|
)
|
|
(851
|
)
|
|||
Sales and maturities of investment securities
|
2,793
|
|
|
2,359
|
|
|
899
|
|
|||
Other
|
—
|
|
|
118
|
|
|
—
|
|
|||
Cash flows from investing activities
|
(274
|
)
|
|
(6,074
|
)
|
|
(12,936
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Net change in short-term borrowings
|
22
|
|
|
(29
|
)
|
|
(19
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
11,627
|
|
|
20,660
|
|
|||
Repayments of long-term debt and lease obligations
|
(25
|
)
|
|
(6,010
|
)
|
|
(4,018
|
)
|
|||
Debt issuance costs
|
—
|
|
|
(69
|
)
|
|
(182
|
)
|
|||
Dividends paid
|
(4,107
|
)
|
|
(3,717
|
)
|
|
(3,294
|
)
|
|||
Purchases of treasury stock
|
(1,410
|
)
|
|
(6,033
|
)
|
|
(7,586
|
)
|
|||
Proceeds from the exercise of stock options
|
254
|
|
|
268
|
|
|
155
|
|
|||
Payments of contingent consideration liabilities
|
(268
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
22
|
|
|
35
|
|
|
36
|
|
|||
Cash flows from financing activities
|
(5,512
|
)
|
|
(3,928
|
)
|
|
5,752
|
|
|||
Effect of exchange rate changes on cash and equivalents
|
29
|
|
|
(338
|
)
|
|
(300
|
)
|
|||
Net change in cash and equivalents
|
4,203
|
|
|
(3,299
|
)
|
|
51
|
|
|||
Cash and equivalents, beginning of year
|
5,100
|
|
|
8,399
|
|
|
8,348
|
|
|||
|
|
|
|
|
|
||||||
Cash and equivalents, end of year
|
$
|
9,303
|
|
|
$
|
5,100
|
|
|
$
|
8,399
|
|
|
|
|
|
|
|
||||||
Other supplemental information
|
|
|
|
|
|
||||||
Interest paid, net of portion capitalized
|
$
|
1,099
|
|
|
$
|
986
|
|
|
$
|
536
|
|
Income taxes paid
|
1,696
|
|
|
3,563
|
|
|
1,108
|
|
|||
Supplemental schedule of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Issuance of common shares associated with acquisitions of businesses
|
—
|
|
|
3,923
|
|
|
8,405
|
|
52
|
2017 Form 10-K
|
|
|
|
|
|
|
2017 Form 10-K
|
53
|
54
|
2017 Form 10-K
|
|
|
as of December 31 (in millions)
|
2017
|
|
2016
|
||||
Finished goods
|
$
|
610
|
|
|
$
|
223
|
|
Work-in-process
|
822
|
|
|
1,080
|
|
||
Raw materials
|
173
|
|
|
141
|
|
||
Inventories
|
$
|
1,605
|
|
|
$
|
1,444
|
|
as of December 31 (in millions)
|
2017
|
|
2016
|
||||
Land
|
$
|
48
|
|
|
$
|
46
|
|
Buildings
|
1,428
|
|
|
1,344
|
|
||
Equipment
|
5,991
|
|
|
5,726
|
|
||
Construction in progress
|
604
|
|
|
410
|
|
||
Property and equipment, gross
|
8,071
|
|
|
7,526
|
|
||
Less accumulated depreciation
|
(5,268
|
)
|
|
(4,922
|
)
|
||
Property and equipment, net
|
$
|
2,803
|
|
|
$
|
2,604
|
|
|
|
2017 Form 10-K
|
55
|
56
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
57
|
58
|
2017 Form 10-K
|
|
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Interest expense
|
$
|
1,150
|
|
|
$
|
1,047
|
|
|
$
|
719
|
|
Interest income
|
(146
|
)
|
|
(82
|
)
|
|
(33
|
)
|
|||
Interest expense, net
|
$
|
1,004
|
|
|
$
|
965
|
|
|
$
|
686
|
|
as of December 31 (in millions)
|
2017
|
|
2016
|
||||
Sales rebates
|
$
|
3,069
|
|
|
$
|
2,887
|
|
Accounts payable
|
1,474
|
|
|
1,407
|
|
||
Dividends payable
|
1,143
|
|
|
1,028
|
|
||
Salaries, wages and commissions
|
763
|
|
|
644
|
|
||
Royalty and license arrangements
|
514
|
|
|
434
|
|
||
Other
|
3,263
|
|
|
2,979
|
|
||
Accounts payable and accrued liabilities
|
$
|
10,226
|
|
|
$
|
9,379
|
|
as of December 31 (in millions)
|
2017
|
|
2016
|
||||
Contingent consideration liabilities
|
$
|
4,266
|
|
|
$
|
3,941
|
|
Pension and other post-employment benefits
|
2,740
|
|
|
2,085
|
|
||
Liabilities for unrecognized tax benefits
|
2,683
|
|
|
1,166
|
|
||
Income taxes payable
|
4,675
|
|
|
—
|
|
||
Other
|
1,241
|
|
|
1,160
|
|
||
Other long-term liabilities
|
$
|
15,605
|
|
|
$
|
8,352
|
|
|
|
|
2017 Form 10-K
|
59
|
|
Years ended December 31,
|
||||||||||
(in millions, except per share information)
|
2017
|
|
2016
|
|
2015
|
||||||
Basic EPS
|
|
|
|
|
|
||||||
Net earnings
|
$
|
5,309
|
|
|
$
|
5,953
|
|
|
$
|
5,144
|
|
Earnings allocated to participating securities
|
26
|
|
|
30
|
|
|
26
|
|
|||
Earnings available to common shareholders
|
$
|
5,283
|
|
|
$
|
5,923
|
|
|
$
|
5,118
|
|
Weighted-average basic shares outstanding
|
1,596
|
|
|
1,622
|
|
|
1,625
|
|
|||
Basic earnings per share
|
$
|
3.31
|
|
|
$
|
3.65
|
|
|
$
|
3.15
|
|
|
|
|
|
|
|
||||||
Diluted EPS
|
|
|
|
|
|
||||||
Net earnings
|
$
|
5,309
|
|
|
$
|
5,953
|
|
|
$
|
5,144
|
|
Earnings allocated to participating securities
|
26
|
|
|
30
|
|
|
26
|
|
|||
Earnings available to common shareholders
|
$
|
5,283
|
|
|
$
|
5,923
|
|
|
$
|
5,118
|
|
Weighted-average shares of common stock outstanding
|
1,596
|
|
|
1,622
|
|
|
1,625
|
|
|||
Effect of dilutive securities
|
7
|
|
|
9
|
|
|
12
|
|
|||
Weighted-average diluted shares outstanding
|
1,603
|
|
|
1,631
|
|
|
1,637
|
|
|||
Diluted earnings per share
|
$
|
3.30
|
|
|
$
|
3.63
|
|
|
$
|
3.13
|
|
|
60
|
2017 Form 10-K
|
|
|
|
Years ended December 31,
|
||||||
(in millions, except per share information)
|
2016
|
|
2015
|
||||
Net revenues
|
$
|
25,641
|
|
|
$
|
22,869
|
|
Net earnings
|
5,907
|
|
|
4,894
|
|
||
Basic earnings per share
|
$
|
3.58
|
|
|
$
|
2.90
|
|
Diluted earnings per share
|
$
|
3.56
|
|
|
$
|
2.88
|
|
|
|
2017 Form 10-K
|
61
|
62
|
2017 Form 10-K
|
|
|
(in millions)
|
|
||
Assets acquired and liabilities assumed
|
|
|
|
Cash and equivalents
|
$
|
877
|
|
Short-term investments
|
11
|
|
|
Accounts receivable
|
106
|
|
|
Inventories
|
492
|
|
|
Other assets
|
212
|
|
|
Intangible assets
|
|
|
|
Definite-lived developed product rights
|
4,590
|
|
|
Definite-lived license agreements
|
6,780
|
|
|
Indefinite-lived research and development
|
7,180
|
|
|
Accounts payable and accrued liabilities
|
(381
|
)
|
|
Deferred income taxes
|
(6,453
|
)
|
|
Other long-term liabilities
|
(254
|
)
|
|
Total identifiable net assets
|
13,160
|
|
|
Goodwill
|
7,610
|
|
|
Total assets acquired and liabilities assumed
|
$
|
20,770
|
|
|
|
2017 Form 10-K
|
63
|
year ended December 31 (in millions, except per share information)
|
2015
|
||
Net revenues
|
$
|
23,215
|
|
Net earnings
|
5,345
|
|
|
Basic earnings per share
|
$
|
3.18
|
|
Diluted earnings per share
|
$
|
3.16
|
|
64
|
2017 Form 10-K
|
|
|
|
years ended December 31 (in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States - Janssen's share of profits (included in cost of products sold)
|
|
$
|
1,001
|
|
|
$
|
735
|
|
|
$
|
306
|
|
International - AbbVie's share of profits (included in net revenues)
|
|
429
|
|
|
252
|
|
|
95
|
|
|||
Global - AbbVie's share of other costs (included in respective line items)
|
|
288
|
|
|
262
|
|
|
159
|
|
|
|
2017 Form 10-K
|
65
|
|
(in millions)
|
|
||
Balance as of December 31, 2015
|
$
|
13,168
|
|
Additions (see Note 5)
|
2,360
|
|
|
Foreign currency translation
|
(112
|
)
|
|
Balance as of December 31, 2016
|
15,416
|
|
|
Foreign currency translation
|
369
|
|
|
Balance as of December 31, 2017
|
$
|
15,785
|
|
|
2017
|
|
2016
|
||||||||||||||||||||
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
|
$
|
16,138
|
|
|
$
|
(4,982
|
)
|
|
$
|
11,156
|
|
|
$
|
16,464
|
|
|
$
|
(4,256
|
)
|
|
$
|
12,208
|
|
License agreements
|
7,822
|
|
|
(1,409
|
)
|
|
6,413
|
|
|
7,809
|
|
|
(1,110
|
)
|
|
6,699
|
|
||||||
Total definite-lived intangible assets
|
23,960
|
|
|
(6,391
|
)
|
|
17,569
|
|
|
24,273
|
|
|
(5,366
|
)
|
|
18,907
|
|
||||||
Indefinite-lived research and development
|
9,990
|
|
|
—
|
|
|
9,990
|
|
|
9,990
|
|
|
—
|
|
|
9,990
|
|
||||||
Total intangible assets, net
|
$
|
33,950
|
|
|
$
|
(6,391
|
)
|
|
$
|
27,559
|
|
|
$
|
34,263
|
|
|
$
|
(5,366
|
)
|
|
$
|
28,897
|
|
(in billions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||
Anticipated annual amortization expense
|
$
|
1.3
|
|
|
$
|
1.5
|
|
|
$
|
1.7
|
|
|
$
|
1.9
|
|
|
$
|
2.1
|
|
66
|
2017 Form 10-K
|
|
|
|
|
|
2017 Form 10-K
|
67
|
|
as of December 31 (dollars in millions)
|
Effective
interest rate
in 2017
(a)
|
|
2017
|
|
Effective
interest rate
in 2016
(a)
|
|
2016
|
||||||
Senior notes issued in 2012
|
|
|
|
|
|
|
|
||||||
2.00% notes due 2018
|
2.15
|
%
|
|
1,000
|
|
|
2.15
|
%
|
|
1,000
|
|
||
2.90% notes due 2022
|
2.97
|
%
|
|
3,100
|
|
|
2.97
|
%
|
|
3,100
|
|
||
4.40% notes due 2042
|
4.46
|
%
|
|
2,600
|
|
|
4.46
|
%
|
|
2,600
|
|
||
Senior notes issued in 2015
|
|
|
|
|
|
|
|
||||||
1.80% notes due 2018
|
1.92
|
%
|
|
3,000
|
|
|
1.92
|
%
|
|
3,000
|
|
||
2.50% notes due 2020
|
2.65
|
%
|
|
3,750
|
|
|
2.65
|
%
|
|
3,750
|
|
||
3.20% notes due 2022
|
3.28
|
%
|
|
1,000
|
|
|
3.28
|
%
|
|
1,000
|
|
||
3.60% notes due 2025
|
3.66
|
%
|
|
3,750
|
|
|
3.66
|
%
|
|
3,750
|
|
||
4.50% notes due 2035
|
4.58
|
%
|
|
2,500
|
|
|
4.58
|
%
|
|
2,500
|
|
||
4.70% notes due 2045
|
4.73
|
%
|
|
2,700
|
|
|
4.73
|
%
|
|
2,700
|
|
||
Senior notes issued in 2016
|
|
|
|
|
|
|
|
||||||
2.30% notes due 2021
|
2.40
|
%
|
|
1,800
|
|
|
2.40
|
%
|
|
1,800
|
|
||
2.85% notes due 2023
|
2.91
|
%
|
|
1,000
|
|
|
2.91
|
%
|
|
1,000
|
|
||
3.20% notes due 2026
|
3.28
|
%
|
|
2,000
|
|
|
3.28
|
%
|
|
2,000
|
|
||
4.30% notes due 2036
|
4.37
|
%
|
|
1,000
|
|
|
4.37
|
%
|
|
1,000
|
|
||
4.45% notes due 2046
|
4.50
|
%
|
|
2,000
|
|
|
4.50
|
%
|
|
2,000
|
|
||
Senior Euro notes issued in 2016
|
|
|
|
|
|
|
|
||||||
0.38% notes due 2019 (€1,400 principal)
|
0.55
|
%
|
|
1,673
|
|
|
0.55
|
%
|
|
1,464
|
|
||
1.38% notes due 2024 (€1,450 principal)
|
1.46
|
%
|
|
1,733
|
|
|
1.46
|
%
|
|
1,516
|
|
||
2.13% notes due 2028 (€750 principal)
|
2.18
|
%
|
|
896
|
|
|
2.18
|
%
|
|
784
|
|
||
Term loan facilities
|
|
|
|
|
|
|
|
||||||
Floating rate notes due 2018
|
2.26
|
%
|
|
2,000
|
|
|
1.64
|
%
|
|
2,000
|
|
||
Other
|
|
|
|
110
|
|
|
|
|
|
113
|
|
||
Fair value hedges
|
|
|
(401
|
)
|
|
|
|
(338
|
)
|
||||
Unamortized bond discounts
|
|
|
(97
|
)
|
|
|
|
(110
|
)
|
||||
Unamortized deferred financing costs
|
|
|
(146
|
)
|
|
|
|
(164
|
)
|
||||
Total long-term debt and lease obligations
|
|
|
36,968
|
|
|
|
|
36,465
|
|
||||
Current portion
|
|
|
6,015
|
|
|
|
|
25
|
|
||||
Noncurrent portion
|
|
|
$
|
30,953
|
|
|
|
|
$
|
36,440
|
|
(a)
|
Excludes the effect of any related interest rate swaps.
|
68
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
69
|
as of and for the years ending December 31 (in millions)
|
Operating
leases
|
|
Debt maturities
and capital leases
|
||||
2018
|
$
|
143
|
|
|
$
|
6,026
|
|
2019
|
126
|
|
|
1,698
|
|
||
2020
|
109
|
|
|
3,771
|
|
||
2021
|
85
|
|
|
1,836
|
|
||
2022
|
66
|
|
|
4,102
|
|
||
Thereafter
|
428
|
|
|
20,179
|
|
||
Total obligations and commitments
|
957
|
|
|
37,612
|
|
||
Fair value hedges, unamortized bond discounts and deferred financing costs
|
|
|
|
(644
|
)
|
||
Total long-term debt and lease obligations
|
$
|
957
|
|
|
$
|
36,968
|
|
|
70
|
2017 Form 10-K
|
|
|
|
Fair value -
Derivatives in asset position
|
|
Fair value -
Derivatives in liability position
|
||||||||||||
as of December 31 (in millions)
|
Balance sheet caption
|
2017
|
2016
|
|
Balance sheet caption
|
2017
|
2016
|
||||||||
Foreign currency forward exchange contracts
|
|
|
|
|
|
|
|
||||||||
Designated as cash flow hedges
|
Prepaid expenses and other
|
$
|
1
|
|
$
|
170
|
|
|
Accounts payable and accrued liabilities
|
$
|
120
|
|
$
|
5
|
|
Not designated as hedges
|
Prepaid expenses and other
|
22
|
|
55
|
|
|
Accounts payable and accrued liabilities
|
29
|
|
33
|
|
||||
Interest rate swaps designated as fair value hedges
|
Prepaid expenses and other
|
—
|
|
—
|
|
|
Accounts payable and accrued liabilities
|
8
|
|
—
|
|
||||
Interest rate swaps designated as fair value hedges
|
Other assets
|
—
|
|
—
|
|
|
Other long-term liabilities
|
393
|
|
338
|
|
||||
Total derivatives
|
|
$
|
23
|
|
$
|
225
|
|
|
|
$
|
550
|
|
$
|
376
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
years ended December 31 (in millions)
|
|
Cash Flow
Hedges
|
Net Investment Hedges
|
Total
|
|
Cash Flow
Hedges
|
Net Investment Hedges
|
Total
|
|
Cash Flow
Hedges |
Net Investment Hedges
|
Total
|
||||||||||||||||||
Foreign currency forward exchange contracts
|
|
$
|
(250
|
)
|
$
|
—
|
|
$
|
(250
|
)
|
|
$
|
174
|
|
$
|
118
|
|
$
|
292
|
|
|
$
|
122
|
|
$
|
—
|
|
$
|
122
|
|
|
|
2017 Form 10-K
|
71
|
years ended December 31 (in millions)
|
Statement of earnings caption
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency forward exchange contracts
|
|
|
|
|
|
|
||||||
Designated as cash flow hedges
|
Cost of products sold
|
$
|
118
|
|
|
$
|
20
|
|
|
$
|
265
|
|
Not designated as hedges
|
Net foreign exchange loss
|
(96
|
)
|
|
6
|
|
|
(155
|
)
|
|||
Non-designated treasury rate lock agreements
|
Other expense, net
|
—
|
|
|
(12
|
)
|
|
—
|
|
|||
Interest rate swaps designated as fair value hedges
|
Interest expense, net
|
(63
|
)
|
|
(266
|
)
|
|
108
|
|
|||
Total
|
|
$
|
(41
|
)
|
|
$
|
(252
|
)
|
|
$
|
218
|
|
•
|
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.
|
|
|
|
Basis of fair value measurement
|
||||||||||||
(in millions)
|
Total
|
|
Quoted prices in active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and equivalents
|
$
|
9,303
|
|
|
$
|
849
|
|
|
$
|
8,454
|
|
|
$
|
—
|
|
Debt securities
|
2,524
|
|
|
—
|
|
|
2,524
|
|
|
—
|
|
||||
Equity securities
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts
|
23
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
Total assets
|
$
|
11,854
|
|
|
$
|
853
|
|
|
$
|
11,001
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate hedges
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
401
|
|
|
$
|
—
|
|
Foreign currency contracts
|
149
|
|
|
—
|
|
|
149
|
|
|
—
|
|
||||
Contingent consideration
|
4,534
|
|
|
—
|
|
|
—
|
|
|
4,534
|
|
||||
Total liabilities
|
$
|
5,084
|
|
|
$
|
—
|
|
|
$
|
550
|
|
|
$
|
4,534
|
|
72
|
2017 Form 10-K
|
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||
(in millions)
|
Total
|
|
Quoted prices in active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and equivalents
|
$
|
5,100
|
|
|
$
|
1,191
|
|
|
$
|
3,909
|
|
|
$
|
—
|
|
Time deposits
|
1,014
|
|
|
—
|
|
|
1,014
|
|
|
—
|
|
||||
Debt securities
|
1,974
|
|
|
—
|
|
|
1,974
|
|
|
—
|
|
||||
Equity securities
|
76
|
|
|
76
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts
|
225
|
|
|
—
|
|
|
225
|
|
|
—
|
|
||||
Total assets
|
$
|
8,389
|
|
|
$
|
1,267
|
|
|
$
|
7,122
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate hedges
|
$
|
338
|
|
|
$
|
—
|
|
|
$
|
338
|
|
|
$
|
—
|
|
Foreign currency contracts
|
38
|
|
|
—
|
|
|
38
|
|
|
—
|
|
||||
Contingent consideration
|
4,213
|
|
|
—
|
|
|
—
|
|
|
4,213
|
|
||||
Total liabilities
|
$
|
4,589
|
|
|
$
|
—
|
|
|
$
|
376
|
|
|
$
|
4,213
|
|
years ended December 31 (in millions)
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
4,213
|
|
|
$
|
—
|
|
Additions (See Note 5)
|
|
—
|
|
|
3,985
|
|
||
Change in fair value recognized in net earnings
|
|
626
|
|
|
228
|
|
||
Milestone payments
|
|
(305
|
)
|
|
—
|
|
||
Ending balance
|
|
$
|
4,534
|
|
|
$
|
4,213
|
|
|
|
2017 Form 10-K
|
73
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||||
(in millions)
|
Book Value
|
Approximate
fair values
|
|
Quoted prices in active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
Inputs
(Level 3)
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
$
|
48
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Total assets
|
$
|
48
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
400
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
400
|
|
|
$
|
—
|
|
Current portion of long-term debt and lease obligations, excluding fair value hedges
|
6,023
|
|
6,034
|
|
|
4,004
|
|
|
2,030
|
|
|
—
|
|
|||||
Long-term debt and lease obligations, excluding fair value hedges
|
31,346
|
|
32,846
|
|
|
32,763
|
|
|
83
|
|
|
—
|
|
|||||
Total liabilities
|
$
|
37,769
|
|
$
|
39,280
|
|
|
$
|
36,767
|
|
|
$
|
2,513
|
|
|
$
|
—
|
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||||
(in millions)
|
Book Value
|
Approximate
fair values
|
|
Quoted prices in active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
Inputs
(Level 3)
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
$
|
42
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
37
|
|
Total assets
|
$
|
42
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
37
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
377
|
|
$
|
377
|
|
|
$
|
—
|
|
|
$
|
377
|
|
|
$
|
—
|
|
Current portion of long-term debt and lease obligations, excluding fair value hedges
|
25
|
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|||||
Long-term debt and lease obligations, excluding fair value hedges
|
36,778
|
|
36,664
|
|
|
34,589
|
|
|
2,075
|
|
|
—
|
|
|||||
Total liabilities
|
$
|
37,180
|
|
$
|
37,066
|
|
|
$
|
34,589
|
|
|
$
|
2,477
|
|
|
$
|
—
|
|
74
|
2017 Form 10-K
|
|
|
|
Amortized Cost
|
|
Gross unrealized
|
|
Fair Value
|
||||||||||
(in millions)
|
|
Gains
|
|
Losses
|
|
||||||||||
Asset backed securities
|
$
|
930
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
|
$
|
928
|
|
Corporate debt securities
|
1,451
|
|
|
4
|
|
|
(2
|
)
|
|
1,453
|
|
||||
Other debt securities
|
144
|
|
|
—
|
|
|
(1
|
)
|
|
143
|
|
||||
Equity securities
|
4
|
|
|
2
|
|
|
(2
|
)
|
|
4
|
|
||||
Total
|
$
|
2,529
|
|
|
$
|
7
|
|
|
$
|
(8
|
)
|
|
$
|
2,528
|
|
|
Amortized Cost
|
|
Gross unrealized
|
|
Fair Value
|
||||||||||
(in millions)
|
|
Gains
|
|
Losses
|
|
||||||||||
Asset backed securities
|
$
|
891
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
888
|
|
Corporate debt securities
|
961
|
|
|
1
|
|
|
(2
|
)
|
|
960
|
|
||||
Other debt securities
|
127
|
|
|
—
|
|
|
(1
|
)
|
|
126
|
|
||||
Equity securities
|
18
|
|
|
60
|
|
|
(2
|
)
|
|
76
|
|
||||
Total
|
$
|
1,997
|
|
|
$
|
62
|
|
|
$
|
(9
|
)
|
|
$
|
2,050
|
|
|
|
2017 Form 10-K
|
75
|
|
|
Defined
benefit plans
|
|
Other
post-employment
plans
|
||||||||||||
as of and for the years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Projected benefit obligations
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
$
|
5,829
|
|
|
$
|
5,387
|
|
|
$
|
627
|
|
|
$
|
557
|
|
Service cost
|
236
|
|
|
210
|
|
|
26
|
|
|
25
|
|
||||
Interest cost
|
204
|
|
|
201
|
|
|
24
|
|
|
24
|
|
||||
Employee contributions
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss
|
714
|
|
|
313
|
|
|
149
|
|
|
33
|
|
||||
Benefits paid
|
(173
|
)
|
|
(163
|
)
|
|
(15
|
)
|
|
(12
|
)
|
||||
Other, primarily foreign currency translation adjustments
|
173
|
|
|
(120
|
)
|
|
2
|
|
|
—
|
|
||||
End of period
|
6,985
|
|
|
5,829
|
|
|
813
|
|
|
627
|
|
||||
Fair value of plan assets
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
4,572
|
|
|
4,174
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
684
|
|
|
383
|
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
246
|
|
|
273
|
|
|
15
|
|
|
12
|
|
||||
Employee contributions
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(173
|
)
|
|
(163
|
)
|
|
(15
|
)
|
|
(12
|
)
|
||||
Other, primarily foreign currency translation adjustments
|
68
|
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
||||
End of period
|
5,399
|
|
|
4,572
|
|
|
—
|
|
|
—
|
|
||||
Funded status, end of period
|
$
|
(1,586
|
)
|
|
$
|
(1,257
|
)
|
|
$
|
(813
|
)
|
|
$
|
(627
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized on the consolidated balance sheets
|
|
|
|
|
|
|
|
||||||||
Other assets
|
$
|
388
|
|
|
$
|
240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts payable and accrued liabilities
|
(32
|
)
|
|
(25
|
)
|
|
(15
|
)
|
|
(14
|
)
|
||||
Other long-term liabilities
|
(1,942
|
)
|
|
(1,472
|
)
|
|
(798
|
)
|
|
(613
|
)
|
||||
Net obligation
|
$
|
(1,586
|
)
|
|
$
|
(1,257
|
)
|
|
$
|
(813
|
)
|
|
$
|
(627
|
)
|
Actuarial loss, net
|
$
|
2,471
|
|
|
$
|
2,118
|
|
|
$
|
320
|
|
|
$
|
179
|
|
Prior service cost (credit)
|
12
|
|
|
14
|
|
|
(29
|
)
|
|
(37
|
)
|
||||
Accumulated other comprehensive loss
|
$
|
2,483
|
|
|
$
|
2,132
|
|
|
$
|
291
|
|
|
$
|
142
|
|
76
|
2017 Form 10-K
|
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Defined benefit plans
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
$
|
412
|
|
|
$
|
284
|
|
|
$
|
(117
|
)
|
Amortization of actuarial loss and prior service cost
|
(107
|
)
|
|
(85
|
)
|
|
(127
|
)
|
|||
Foreign exchange gain (loss)
|
46
|
|
|
(22
|
)
|
|
(37
|
)
|
|||
Total pre-tax loss (gain) recognized in other comprehensive loss
|
$
|
351
|
|
|
$
|
177
|
|
|
$
|
(281
|
)
|
Other post-employment plans
|
|
|
|
|
|
||||||
Actuarial loss (gain)
|
$
|
149
|
|
|
$
|
33
|
|
|
$
|
(17
|
)
|
Amortization of actuarial loss and prior service cost (credit)
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Total pre-tax loss (gain) recognized in other comprehensive loss
|
$
|
149
|
|
|
$
|
33
|
|
|
$
|
(19
|
)
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Defined benefit plans
|
|
|
|
|
|
||||||
Service cost
|
$
|
236
|
|
|
$
|
210
|
|
|
$
|
227
|
|
Interest cost
|
204
|
|
|
201
|
|
|
219
|
|
|||
Expected return on plan assets
|
(382
|
)
|
|
(354
|
)
|
|
(325
|
)
|
|||
Amortization of actuarial loss and prior service cost
|
107
|
|
|
85
|
|
|
127
|
|
|||
Net periodic benefit cost
|
$
|
165
|
|
|
$
|
142
|
|
|
$
|
248
|
|
Other post-employment plans
|
|
|
|
|
|
||||||
Service cost
|
$
|
26
|
|
|
$
|
25
|
|
|
$
|
25
|
|
Interest cost
|
24
|
|
|
24
|
|
|
23
|
|
|||
Amortization of actuarial loss and prior service cost
|
—
|
|
|
—
|
|
|
2
|
|
|||
Net periodic benefit cost
|
$
|
50
|
|
|
$
|
49
|
|
|
$
|
50
|
|
|
|
2017 Form 10-K
|
77
|
years ended December 31
|
2017
|
|
2016
|
|
2015
|
|||
Defined benefit plans
|
|
|
|
|
|
|||
Discount rate for determining service cost
|
3.9
|
%
|
|
4.4
|
%
|
|
3.9
|
%
|
Discount rate for determining interest cost
|
3.7
|
%
|
|
4.0
|
%
|
|
3.9
|
%
|
Expected long-term rate of return on plan assets
|
7.8
|
%
|
|
7.9
|
%
|
|
7.8
|
%
|
Expected rate of change in compensation
|
4.4
|
%
|
|
4.4
|
%
|
|
4.4
|
%
|
Other post-employment plans
|
|
|
|
|
|
|||
Discount rate for determining service cost
|
4.9
|
%
|
|
5.1
|
%
|
|
4.5
|
%
|
Discount rate for determining interest cost
|
4.1
|
%
|
|
4.3
|
%
|
|
4.5
|
%
|
78
|
2017 Form 10-K
|
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||
as of December 31 (in millions)
|
2017
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Equities
|
|
|
|
|
|
|
|
||||||||
U.S. large cap
(a)
|
$
|
597
|
|
|
$
|
597
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. mid cap
(b)
|
74
|
|
|
74
|
|
|
—
|
|
|
—
|
|
||||
International
(c)
|
63
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
(d)
|
110
|
|
|
6
|
|
|
104
|
|
|
—
|
|
||||
Corporate debt instruments
(d)
|
238
|
|
|
132
|
|
|
106
|
|
|
—
|
|
||||
Non-U.S. government securities
(d)
|
59
|
|
|
25
|
|
|
34
|
|
|
—
|
|
||||
Other
(d)
|
265
|
|
|
260
|
|
|
5
|
|
|
—
|
|
||||
Absolute return funds
(e)
|
262
|
|
|
4
|
|
|
258
|
|
|
—
|
|
||||
Real assets
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Other
(f)
|
40
|
|
|
40
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
1,715
|
|
|
$
|
1,208
|
|
|
$
|
507
|
|
|
$
|
—
|
|
Total assets measured at NAV
|
3,684
|
|
|
|
|
|
|
|
|||||||
Fair value of plan assets
|
$
|
5,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||
as of December 31 (in millions)
|
2016
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Equities
|
|
|
|
|
|
|
|
||||||||
U.S. large cap
(a)
|
$
|
519
|
|
|
$
|
519
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. mid cap
(b)
|
63
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||
International
(c)
|
97
|
|
|
97
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
(d)
|
94
|
|
|
—
|
|
|
94
|
|
|
—
|
|
||||
Corporate debt instruments
(d)
|
243
|
|
|
162
|
|
|
81
|
|
|
—
|
|
||||
Non-U.S. government securities
(d)
|
32
|
|
|
30
|
|
|
2
|
|
|
|
|
||||
Other
(d)
|
184
|
|
|
179
|
|
|
5
|
|
|
—
|
|
||||
Absolute return funds
(e)
|
228
|
|
|
3
|
|
|
225
|
|
|
—
|
|
||||
Real assets
|
31
|
|
|
31
|
|
|
—
|
|
|
—
|
|
||||
Other
(f)
|
61
|
|
|
61
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
1,552
|
|
|
$
|
1,145
|
|
|
$
|
407
|
|
|
$
|
—
|
|
Total assets measured at NAV
|
3,020
|
|
|
|
|
|
|
|
|||||||
Fair value of plan assets
|
$
|
4,572
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
2017 Form 10-K
|
79
|
(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 cash equivalents.
|
years ending December 31 (in millions)
|
Defined
benefit plans
|
|
Other
post-employment
plans
|
||||
2018
|
$
|
192
|
|
|
$
|
16
|
|
2019
|
206
|
|
|
19
|
|
||
2020
|
218
|
|
|
20
|
|
||
2021
|
232
|
|
|
22
|
|
||
2022
|
246
|
|
|
24
|
|
||
2023 to 2027
|
1,474
|
|
|
153
|
|
80
|
2017 Form 10-K
|
|
|
|
|
Years ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of products sold
|
$
|
23
|
|
|
$
|
22
|
|
|
$
|
21
|
|
Research and development
|
159
|
|
|
193
|
|
|
111
|
|
|||
Selling, general and administrative
|
183
|
|
|
181
|
|
|
150
|
|
|||
Pre-tax compensation expense
|
365
|
|
|
396
|
|
|
282
|
|
|||
Tax benefit
|
73
|
|
|
104
|
|
|
89
|
|
|||
After-tax compensation expense
|
$
|
292
|
|
|
$
|
292
|
|
|
$
|
193
|
|
|
|
2017 Form 10-K
|
81
|
(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, 2016
|
15,962
|
|
|
$
|
33.63
|
|
|
3.7
|
|
$
|
463
|
|
Granted
|
1,241
|
|
|
61.36
|
|
|
|
|
|
|||
Exercised
|
(8,836
|
)
|
|
30.06
|
|
|
|
|
|
|||
Lapsed
|
(51
|
)
|
|
32.58
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
8,316
|
|
|
$
|
41.69
|
|
|
5.1
|
|
$
|
458
|
|
Exercisable at December 31, 2017
|
5,661
|
|
|
$
|
35.51
|
|
|
3.6
|
|
$
|
346
|
|
82
|
2017 Form 10-K
|
|
|
(share units in thousands)
|
Share units
|
|
Weighted-average
grant date fair value
|
|||
Outstanding at December 31, 2016
|
10,715
|
|
|
$
|
56.47
|
|
Granted
|
6,109
|
|
|
61.89
|
|
|
Vested
|
(5,532
|
)
|
|
56.34
|
|
|
Forfeited
|
(610
|
)
|
|
59.50
|
|
|
Outstanding at December 31, 2017
|
10,682
|
|
|
$
|
59.47
|
|
2017
|
|
2016
|
||||||||
Date Declared
|
|
Payment Date
|
|
Dividend Per Share
|
|
Date Declared
|
|
Payment Date
|
|
Dividend Per Share
|
10/27/17
|
|
02/15/18
|
|
$0.71
|
|
10/28/16
|
|
02/15/17
|
|
$0.64
|
09/08/17
|
|
11/15/17
|
|
$0.64
|
|
09/09/16
|
|
11/15/16
|
|
$0.57
|
06/22/17
|
|
08/15/17
|
|
$0.64
|
|
06/16/16
|
|
08/15/16
|
|
$0.57
|
02/16/17
|
|
05/15/17
|
|
$0.64
|
|
02/18/16
|
|
05/16/16
|
|
$0.57
|
|
|
2017 Form 10-K
|
83
|
(in millions) (brackets denote losses)
|
Foreign
currency
translation
adjustments
|
|
Net investment hedging
activities
|
|
Pension
and post-
employment
benefits
|
|
Marketable security activities
|
|
Cash flow hedging
activities
|
|
Total
|
||||||||||||
Balance as of December 31, 2014
|
$
|
(603
|
)
|
|
$
|
—
|
|
|
$
|
(1,608
|
)
|
|
$
|
3
|
|
|
$
|
177
|
|
|
$
|
(2,031
|
)
|
Other comprehensive income (loss) before
reclassifications
|
(667
|
)
|
|
—
|
|
|
147
|
|
|
48
|
|
|
122
|
|
|
(350
|
)
|
||||||
Net losses (gains) reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
83
|
|
|
(4
|
)
|
|
(259
|
)
|
|
(180
|
)
|
||||||
Net current-period other comprehensive
income (loss)
|
(667
|
)
|
|
—
|
|
|
230
|
|
|
44
|
|
|
(137
|
)
|
|
(530
|
)
|
||||||
Balance as of December 31, 2015
|
(1,270
|
)
|
|
—
|
|
|
(1,378
|
)
|
|
47
|
|
|
40
|
|
|
(2,561
|
)
|
||||||
Other comprehensive income (loss) before
reclassifications
|
(165
|
)
|
|
140
|
|
|
(194
|
)
|
|
7
|
|
|
160
|
|
|
(52
|
)
|
||||||
Net losses (gains) reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
59
|
|
|
(8
|
)
|
|
(24
|
)
|
|
27
|
|
||||||
Net current-period other comprehensive
income (loss)
|
(165
|
)
|
|
140
|
|
|
(135
|
)
|
|
(1
|
)
|
|
136
|
|
|
(25
|
)
|
||||||
Balance as of December 31, 2016
|
(1,435
|
)
|
|
140
|
|
|
(1,513
|
)
|
|
46
|
|
|
176
|
|
|
(2,586
|
)
|
||||||
Other comprehensive income (loss) before
reclassifications
|
680
|
|
|
(343
|
)
|
|
(480
|
)
|
|
29
|
|
|
(230
|
)
|
|
(344
|
)
|
||||||
Net losses (gains) reclassified from
accumulated other comprehensive loss
|
316
|
|
|
—
|
|
|
74
|
|
|
(75
|
)
|
|
(112
|
)
|
|
203
|
|
||||||
Net current-period other comprehensive
income (loss)
|
996
|
|
|
(343
|
)
|
|
(406
|
)
|
|
(46
|
)
|
|
(342
|
)
|
|
(141
|
)
|
||||||
Balance as of December 31, 2017
|
$
|
(439
|
)
|
|
$
|
(203
|
)
|
|
$
|
(1,919
|
)
|
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
(2,727
|
)
|
84
|
2017 Form 10-K
|
|
|
years ended December 31 (in millions) (brackets denote gains)
|
2017
|
|
2016
|
|
2015
|
||||||
Pension and post-employment benefits
|
|
|
|
|
|
||||||
Amortization of actuarial losses and other
(a)
|
$
|
107
|
|
|
$
|
85
|
|
|
$
|
129
|
|
Tax benefit
|
(33
|
)
|
|
(26
|
)
|
|
(46
|
)
|
|||
Total reclassifications, net of tax
|
$
|
74
|
|
|
$
|
59
|
|
|
$
|
83
|
|
|
|
|
|
|
|
||||||
Cash flow hedging activities
|
|
|
|
|
|
||||||
Losses (gains) on designated cash flow hedges
(b)
|
$
|
(118
|
)
|
|
$
|
(20
|
)
|
|
$
|
(265
|
)
|
Tax expense (benefit)
|
6
|
|
|
(4
|
)
|
|
6
|
|
|||
Total reclassifications, net of tax
|
$
|
(112
|
)
|
|
$
|
(24
|
)
|
|
$
|
(259
|
)
|
(a)
|
Amounts are included in the computation of net periodic benefit cost (see
Note 11
).
|
(b)
|
Amounts are included in cost of products sold (see
Note 10
).
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic
|
$
|
(2,678
|
)
|
|
$
|
(1,651
|
)
|
|
$
|
(1,038
|
)
|
Foreign
|
10,405
|
|
|
9,535
|
|
|
7,683
|
|
|||
Total earnings before income tax expense
|
$
|
7,727
|
|
|
$
|
7,884
|
|
|
$
|
6,645
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current
|
|
|
|
|
|
||||||
Domestic
|
$
|
6,204
|
|
|
$
|
2,229
|
|
|
$
|
1,036
|
|
Foreign
|
376
|
|
|
498
|
|
|
313
|
|
|||
Total current taxes
|
$
|
6,580
|
|
|
$
|
2,727
|
|
|
$
|
1,349
|
|
Deferred
|
|
|
|
|
|
||||||
Domestic
|
$
|
(4,898
|
)
|
|
$
|
(792
|
)
|
|
$
|
141
|
|
Foreign
|
736
|
|
|
(4
|
)
|
|
11
|
|
|||
Total deferred taxes
|
$
|
(4,162
|
)
|
|
$
|
(796
|
)
|
|
$
|
152
|
|
Total income tax expense
|
$
|
2,418
|
|
|
$
|
1,931
|
|
|
$
|
1,501
|
|
|
|
2017 Form 10-K
|
85
|
years ended December 31
|
2017
|
|
2016
|
|
2015
|
|||
Statutory tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Effect of foreign operations
|
(12.2
|
)
|
|
(10.3
|
)
|
|
(9.4
|
)
|
U.S. tax credits
|
(4.0
|
)
|
|
(4.4
|
)
|
|
(4.5
|
)
|
Impacts related to U.S. tax reform
|
12.0
|
|
|
—
|
|
|
—
|
|
Tax law change related to foreign currency
|
—
|
|
|
2.4
|
|
|
—
|
|
All other, net
|
0.5
|
|
|
1.8
|
|
|
1.5
|
|
Effective tax rate
|
31.3
|
%
|
|
24.5
|
%
|
|
22.6
|
%
|
86
|
2017 Form 10-K
|
|
|
as of December 31 (in millions)
|
2017
|
|
2016
|
||||
Deferred tax assets
|
|
|
|
||||
Compensation and employee benefits
|
$
|
556
|
|
|
$
|
718
|
|
Accruals and reserves
|
315
|
|
|
425
|
|
||
Chargebacks and rebates
|
305
|
|
|
473
|
|
||
Deferred revenue
|
219
|
|
|
391
|
|
||
Net operating losses and other credit carryforwards
|
208
|
|
|
151
|
|
||
Other
|
429
|
|
|
289
|
|
||
Total deferred tax assets
|
2,032
|
|
|
2,447
|
|
||
Valuation allowances
|
(108
|
)
|
|
(76
|
)
|
||
Total net deferred tax assets
|
1,924
|
|
|
2,371
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Excess of book basis over tax basis of intangible assets
|
(3,762
|
)
|
|
(5,487
|
)
|
||
Excess of book basis over tax basis in investments
|
(181
|
)
|
|
(3,367
|
)
|
||
Other
|
(203
|
)
|
|
(182
|
)
|
||
Total deferred tax liabilities
|
(4,146
|
)
|
|
(9,036
|
)
|
||
Net deferred tax liabilities
|
$
|
(2,222
|
)
|
|
$
|
(6,665
|
)
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
1,168
|
|
|
$
|
954
|
|
|
$
|
421
|
|
Increase due to current year tax positions
|
1,768
|
|
|
118
|
|
|
187
|
|
|||
Increase due to prior year tax positions
|
16
|
|
|
111
|
|
|
369
|
|
|||
Decrease due to prior year tax positions
|
(2
|
)
|
|
(7
|
)
|
|
(15
|
)
|
|||
Settlements
|
(233
|
)
|
|
—
|
|
|
—
|
|
|||
Lapse of statutes of limitations
|
(16
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|||
Ending balance
|
$
|
2,701
|
|
|
$
|
1,168
|
|
|
$
|
954
|
|
|
|
2017 Form 10-K
|
87
|
|
88
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
89
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
HUMIRA
|
$
|
18,427
|
|
|
$
|
16,078
|
|
|
$
|
14,012
|
|
IMBRUVICA
|
2,573
|
|
|
1,832
|
|
|
754
|
|
|||
HCV
|
1,274
|
|
|
1,522
|
|
|
1,639
|
|
|||
Lupron
|
829
|
|
|
821
|
|
|
826
|
|
|||
Creon
|
831
|
|
|
730
|
|
|
632
|
|
|||
Synagis
|
738
|
|
|
730
|
|
|
740
|
|
|||
Synthroid
|
781
|
|
|
763
|
|
|
755
|
|
|||
AndroGel
|
577
|
|
|
675
|
|
|
694
|
|
|||
Kaletra
|
423
|
|
|
549
|
|
|
700
|
|
|||
Sevoflurane
|
410
|
|
|
428
|
|
|
474
|
|
|||
Duodopa
|
355
|
|
|
293
|
|
|
231
|
|
|||
All other
|
998
|
|
|
1,217
|
|
|
1,402
|
|
|||
Total net revenues
|
$
|
28,216
|
|
|
$
|
25,638
|
|
|
$
|
22,859
|
|
90
|
2017 Form 10-K
|
|
|
years ended December 31 (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
18,251
|
|
|
$
|
15,947
|
|
|
$
|
13,561
|
|
Germany
|
1,157
|
|
|
1,104
|
|
|
1,082
|
|
|||
United Kingdom
|
807
|
|
|
776
|
|
|
688
|
|
|||
Japan
|
764
|
|
|
770
|
|
|
599
|
|
|||
France
|
730
|
|
|
713
|
|
|
597
|
|
|||
Canada
|
659
|
|
|
624
|
|
|
551
|
|
|||
Spain
|
521
|
|
|
589
|
|
|
618
|
|
|||
Italy
|
475
|
|
|
523
|
|
|
452
|
|
|||
Brazil
|
410
|
|
|
355
|
|
|
376
|
|
|||
The Netherlands
|
362
|
|
|
352
|
|
|
334
|
|
|||
All other countries
|
4,080
|
|
|
3,885
|
|
|
4,001
|
|
|||
Total net revenues
|
$
|
28,216
|
|
|
$
|
25,638
|
|
|
$
|
22,859
|
|
as of December 31 (in millions)
|
2017
|
|
2016
|
||||
United States and Puerto Rico
|
$
|
1,862
|
|
|
$
|
1,822
|
|
Europe
|
621
|
|
|
504
|
|
||
All other
|
320
|
|
|
278
|
|
||
Total long-lived assets
|
$
|
2,803
|
|
|
$
|
2,604
|
|
|
|
2017 Form 10-K
|
91
|
|
(in millions except per share data)
|
2017
|
|
2016
|
|
||||
First Quarter
|
|
|
|
|
||||
Net revenues
|
$
|
6,538
|
|
|
$
|
5,958
|
|
|
Gross margin
|
4,922
|
|
|
4,589
|
|
|
||
Net earnings
(a)
|
1,711
|
|
|
1,354
|
|
|
||
Basic earnings per share
|
$
|
1.07
|
|
|
$
|
0.83
|
|
|
Diluted earnings per share
|
$
|
1.06
|
|
|
$
|
0.83
|
|
|
Cash dividends declared per common share
|
$
|
0.64
|
|
|
$
|
0.57
|
|
|
Second Quarter
|
|
|
|
|
||||
Net revenues
|
$
|
6,944
|
|
|
$
|
6,452
|
|
|
Gross margin
|
5,416
|
|
|
5,047
|
|
|
||
Net earnings
(b)
|
1,915
|
|
|
1,610
|
|
|
||
Basic earnings per share
|
$
|
1.20
|
|
|
$
|
0.99
|
|
|
Diluted earnings per share
|
$
|
1.19
|
|
|
$
|
0.98
|
|
|
Cash dividends declared per common share
|
$
|
0.64
|
|
|
$
|
0.57
|
|
|
Third Quarter
|
|
|
|
|
||||
Net revenues
|
$
|
6,995
|
|
|
$
|
6,432
|
|
|
Gross margin
|
5,379
|
|
|
4,928
|
|
|
||
Net earnings
(c)
|
1,631
|
|
|
1,598
|
|
|
||
Basic earnings per share
|
$
|
1.02
|
|
|
$
|
0.97
|
|
|
Diluted earnings per share
|
$
|
1.01
|
|
|
$
|
0.97
|
|
|
Cash dividends declared per common share
|
$
|
0.64
|
|
|
$
|
0.57
|
|
|
Fourth Quarter
|
|
|
|
|
||||
Net revenues
|
$
|
7,739
|
|
|
$
|
6,796
|
|
|
Gross margin
|
5,459
|
|
|
5,241
|
|
|
||
Net earnings
(d)
|
52
|
|
|
1,391
|
|
|
||
Basic earnings per share
|
$
|
0.03
|
|
|
$
|
0.86
|
|
|
Diluted earnings per share
|
$
|
0.03
|
|
|
$
|
0.85
|
|
|
Cash dividends declared per common share
|
$
|
0.71
|
|
|
$
|
0.64
|
|
|
(a)
|
First quarter results in 2017 included after-tax costs of
$84 million
related to the change in fair value of contingent consideration liabilities. First quarter results in 2016 included a net foreign exchange loss of
$298 million
related to the devaluation of AbbVie’s net monetary assets denominated in the Venezuelan bolivar.
|
(b)
|
Second quarter results in 2017 included an after-tax charge of
$62 million
to increase litigation reserves and after-tax costs of
$61 million
related to the change in fair value of contingent consideration liabilities. Second quarter results in 2016 included after-tax costs totaling
$122 million
related to the acquisition of Stemcentrx and BI compounds as well as the amortization of the acquisition date fair value step-up for inventory related to the acquisition of Pharmacyclics.
|
(c)
|
Third quarter results in 2017 included after-tax costs of
$401 million
related to the change in fair value of contingent consideration liabilities. Third quarter results in 2016 included after-tax costs of
$104 million
related to the change in fair value of contingent consideration liabilities.
|
(d)
|
Fourth quarter results in 2017 were impacted by
net charges related to the December 2017 enactment of the Tax Cuts and Jobs Act
, including an after-tax charge of
$4.5 billion
related to the
one-time mandatory repatriation of previously untaxed earnings of foreign subsidiaries
, partially offset by after-tax benefits of
$3.3 billion
due to
|
92
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
93
|
94
|
2017 Form 10-K
|
|
|
|
|
|
|
2017 Form 10-K
|
95
|
96
|
2017 Form 10-K
|
|
|
|
|
2017 Form 10-K
|
97
|
|
98
|
2017 Form 10-K
|
|
|
|
|
|
|
2017 Form 10-K
|
99
|
|
(1)
|
Includes 3,350,775 shares issuable under AbbVie's Incentive Stock Program pursuant to awards granted by Abbott and adjusted into AbbVie awards in connection with AbbVie's separation from Abbott.
|
(2)
|
The weighted-average exercise price does not include outstanding restricted stock units, restricted stock awards and performance shares that have no exercise price.
|
(3)
|
Excludes shares issuable upon the exercise of stock options and pursuant to other rights granted under the Stemcentrx 2011 Equity Incentive Plan, which was assumed by AbbVie upon the consummation of its acquisition of Stemcentrx, Inc. As of December 31, 2017, 562,497 options remained outstanding under this plan. The options have a weighted-average exercise price of $13.62. No further awards will be granted under this plan.
|
(b)
|
Information Concerning Security Ownership.
Incorporated herein by reference is the material under the heading "Securities Ownership—Securities Ownership of Executive Officers and Directors" in the
2018
AbbVie Inc. Proxy Statement. The
2018
Definitive Proxy Statement will be filed on or about
March 19, 2018
.
|
|
|
100
|
2017 Form 10-K
|
|
|
|
(a)
|
Documents filed as part of this Form 10-K.
|
(1)
|
Financial Statements:
See Item 8, "Financial Statements and Supplementary Data," on page 47 hereof, for a list of financial statements.
|
(2)
|
Financial Statement Schedules:
All schedules omitted are inapplicable or the information required is shown in the consolidated financial statements or notes thereto.
|
(3)
|
Exhibits Required by Item 601 of Regulation S-K:
The information called for by this paragraph is set forth in Item 15(b) below.
|
(b)
|
Exhibits:
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
|
2017 Form 10-K
|
101
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
102
|
2017 Form 10-K
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
101
|
|
|
The following financial statements and notes from the AbbVie Inc. Annual Report on Form 10-K for the year ended December 31, 2017 filed on February 16, 2018, formatted in XBRL: (i) Consolidated Statements of Earnings; (ii) Consolidated Statements of Comprehensive Income; (iii) Consolidated Balance Sheets; (iv) Consolidated Statements of Equity; (v) Consolidated Statements of Cash Flows; and (vi) the Notes to Consolidated Financial Statements.
|
|
|
|
The AbbVie Inc. 2018 Definitive Proxy Statement will be filed with the Securities and Exchange Commission under separate cover on or about March 19, 2018.
|
|
|
2017 Form 10-K
|
103
|
*
|
Incorporated herein by reference. Commission file number 001-35565.
|
**
|
Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit hereto.
|
104
|
2017 Form 10-K
|
|
|
|
|
|
2017 Form 10-K
|
105
|
AbbVie Inc.
|
||||
By:
|
|
/s/ RICHARD A. GONZALEZ
|
||
|
|
Name:
|
|
Richard A. Gonzalez
|
|
|
Title:
|
|
Chairman of the Board and
Chief Executive Officer
|
Date:
|
February 16, 2018
|
/s/ RICHARD A. GONZALEZ
|
|
/s/ WILLIAM J. CHASE
|
Richard A. Gonzalez
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
|
|
William J. Chase
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
/s/ ROBERT A. MICHAEL
|
|
|
Robert A. Michael
Vice President, Controller
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ ROBERT J. ALPERN, M.D.
|
|
/s/ ROXANNE S. AUSTIN
|
Robert J. Alpern, M.D.
Director of AbbVie Inc.
|
|
Roxanne S. Austin
Director of AbbVie Inc.
|
|
|
|
/s/ WILLIAM H.L. BURNSIDE
|
|
/s/ BRETT J. HART
|
William H.L. Burnside
Director of AbbVie Inc.
|
|
Brett J. Hart
Director of AbbVie Inc.
|
|
|
|
/s/ EDWARD M. LIDDY
|
|
/s/ MELODY B. MEYER
|
Edward M. Liddy
Director of AbbVie Inc.
|
|
Melody B. Meyer
Director of AbbVie Inc.
|
|
|
|
/s/ EDWARD J. RAPP
|
|
/s/ GLENN F. TILTON
|
Edward J. Rapp
Director of AbbVie Inc.
|
|
Glenn F. Tilton
Director of AbbVie Inc.
|
|
|
|
/s/ FREDERICK H. WADDELL
|
|
|
Frederick H. Waddell
Director of AbbVie Inc.
|
|
|
106
|
2017 Form 10-K
|
|
|
1.
|
Definitions
. To the extent not defined herein, capitalized terms shall have the same meaning as in the Program.
|
(b)
|
Cause
: Unless otherwise defined in the Employee’s Change in Control Agreement, cause shall mean the following, as determined by the Company in its sole discretion:
|
(i)
|
material breach by the Employee of the terms and conditions of the Employee’s employment, including, but not limited to:
|
(A)
|
material breach by the Employee of the Code of Business Conduct;
|
(B)
|
material breach by the Employee of the Employee’s Employee Agreement or employment contract, if any;
|
(C)
|
commission by the Employee of an act of fraud, embezzlement or theft in connection with the Employee’s duties or in the course of the Employee’s employment;
|
(D)
|
wrongful disclosure by the Employee of secret processes or confidential information of the Company or any of its Subsidiaries; or
|
(E)
|
failure by the Employee to substantially perform the duties of the Employee’s employment (other than any such failure resulting from the Employee’s Disability); or
|
(ii)
|
to the extent permitted by applicable law, engagement by the Employee, directly or indirectly, for the benefit of the Employee or others, in any activity, employment or business which is competitive with the Company or any of its Subsidiaries.
|
(c)
|
Change in Control Agreement
: An agreement regarding Change in Control in effect between the Company (or the Surviving Entity) and the Employee.
|
(d)
|
Code of Business Conduct
: The Company’s Code of Business Conduct, as amended from time to time.
|
(e)
|
Controlled Group
: AbbVie and any corporation, partnership and proprietorship under common control (as defined under the aggregation rules of Code Section 414 (b), (c), or (m)) with AbbVie.
|
(f)
|
Data
:
Certain personal information about the Employee held by the Company and the Subsidiary that employs the Employee (if applicable), including (but not limited to) the Employee’s name, home address and telephone number, email address, date of birth, social security, passport or other identification number, salary, nationality, job title, any Shares held in the Company, details of all Awards or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in the Employee’s favor, for the purpose of managing and administering the Program.
|
(g)
|
Disability
:
Sickness or accidental bodily injury, directly and independently of all other causes, that disables the Employee so that the Employee is completely prevented from performing all the duties of his or her occupation or employment.
|
(h)
|
Employee Agreement
: The Employee Agreement entered into by and between the Company and the Employee as it may be amended from time to time.
|
(i)
|
Employee’s Representative
:
The Employee’s
legal
guardian or other legal representative.
|
(j)
|
Good Reason
: Unless otherwise defined in the Employee’s Change in Control Agreement, good reason shall mean the occurrence of any of the following circumstances without the Employee’s express written consent:
|
(i)
|
a significant adverse change in the nature, scope or status of the Employee’s position, authorities or duties from those in effect immediately prior to the Change in Control, including, without limitation, if the Employee was, immediately prior to the Change in Control, an officer of a public company, the Employee ceasing to be an officer of a public company;
|
(ii)
|
the failure by the Company or a Subsidiary to pay the Employee any portion of the Employee’s current compensation, or to pay the Employee any portion of any installment of deferred compensation under any deferred compensation program of the Company, within seven days of the date such compensation is due;
|
(iii)
|
a reduction in the Employee’s annual base salary (or a material change in the frequency of payment) as in effect immediately prior to the Change in Control as the same may be increased from time to time;
|
(iv)
|
the failure by the Company or a Subsidiary to award the Employee an annual bonus in any year which is at least equal to the annual bonus awarded to the Employee under the annual bonus plan of the Company or Subsidiary for the year immediately preceding the year of the Change in Control;
|
(v)
|
the failure by the Company to award the Employee equity-based incentive compensation (such as stock options, shares of restricted stock, restricted stock units, or other equity-based compensation) on a periodic basis consistent with the Company’s practices with respect to timing, value and terms prior to the Change in Control;
|
(vi)
|
the failure by the Company or a Subsidiary to continue to provide the Employee with the welfare benefits, fringe benefits and perquisites enjoyed by the Employee immediately prior to the Change in Control under any of the Company’s or Subsidiary’s plans or policies, including, but not limited to, those plans and policies providing pension, life insurance, medical, health and accident, disability and vacation;
|
(vii)
|
the relocation of the Employee’s base office to a location that is more than 35 miles from the Employee’s base office immediately prior to the Change in Control; or
|
(viii)
|
the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement as contemplated in Section 5.
|
(k)
|
Performance Determination Date
: The date on which the Committee determines whether or to what extent the Performance Vesting Requirements have been achieved.
|
(l)
|
Performance Period
: The period(s) specified in the attached Schedule, over which achievement of the Performance Vesting Requirements is to be measured.
|
(m)
|
Performance Shares
: The maximum number of Shares the Employee may receive under this Award based on the extent to which the Performance Vesting Requirements are achieved. In no event will the number of Performance Shares exceed 275% of the number of Units set forth in the first paragraph of this Agreement.
|
(n)
|
Performance Vesting Requirements
: The performance goals described in the attached Schedule, which must be achieved for Units to vest and the corresponding Shares to be delivered under this Award.
|
(o)
|
Program
: The AbbVie 2013 Incentive Stock Program.
|
(p)
|
Retirement
:
|
(i)
|
Except as provided under (ii) or (iii) below, Retirement means either of the following:
|
•
|
age 55 with 10 years of service; or
|
•
|
age 65 with at least three years of service.
|
(ii)
|
For Employees who (A) are not covered by (iii) below and (B) transferred to the Company directly from Abbott Laboratories either as a result of the Company’s spin-off from Abbott Laboratories or during the period from January 1, 2013 through June 30, 2015 with the consent of each company’s head of human resources and were hired into the Abbott Laboratories controlled group prior to January 1, 2004, Retirement means any of the following:
|
•
|
age 50 with 10 years of service;
|
•
|
age 65 with at least three years of service; or
|
•
|
age 55 with an age and service combination of 70 points, where each year of age is one point and each year of service is one point.
|
(iii)
|
For participants in the AbbVie Pension Plan for Former BASF and Former Solvay Employees, Retirement means either of the following:
|
•
|
age 55 with 10 years of service; or
|
•
|
age 65 with at least three years of service.
|
(iv)
|
For purposes of calculating service under this Section 1(p), except as otherwise provided by the Committee or its delegate: (A) service is earned only if performed for a member of the Controlled Group while that Controlled Group member is a part of the Controlled Group; and (B) for Employees who transferred to the Company directly from Abbott Laboratories during the period from January 1, 2013 through June 30, 2015 either as a result of the
|
(q)
|
Termination
: A severance of employment for any reason (including Retirement) from the Company and all Subsidiaries. Any Termination shall be effective on the last day the Employee performs services for or on behalf of the Company or its Subsidiary, and employment shall not be extended by any statutory or common law notice of termination period.
|
2.
|
Delivery Dates and Shareholder Rights
. The Delivery Dates for Shares issuable with respect to the Units are the respective dates on which the Shares are distributable to the Employee if the Units vest pursuant to Section 4 below. Prior to the Delivery Date(s):
|
(a)
|
the Employee shall not be treated as a shareholder as to any Shares issuable under the Agreement, and shall have only a contractual right to receive Shares, unsecured by any assets of the Company or its Subsidiaries;
|
(b)
|
the Employee shall not be permitted to vote any Shares issuable under the Agreement; and
|
(c)
|
the Employee’s right to receive such Shares will be subject to the adjustment provisions relating to mergers, reorganizations, and similar events set forth in the Program.
|
3.
|
Restrictions
. The Units (encompassing all of the Performance Shares) are subject to the forfeiture provisions in Sections 6 and 7 below. Shares are not earned and may not be sold, exchanged, assigned, transferred, pledged or otherwise disposed of (collectively, the “
Restrictions
”) until an event or combination of events described in subsections 4(a), (b) or (c) or Section 5 occurs.
|
4.
|
Vesting
. If the Company’s 2018 return on equity (as defined and approved by the Committee) is a minimum of 18 percent, the number of Shares that become issuable under this Award, as described in this Section 4 and subject to the provisions of Sections 5, 6 and 7 below, will be calculated based on the extent to which the Performance Vesting Requirements described in the attached Schedule are achieved. If the Company’s 2018 return on equity is less than 18 percent, no Units will vest and no Shares will become issuable under the Award. The Committee may equitably adjust the Performance Vesting Requirements described in the attached Schedule in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be unusual in nature or infrequent in occurrence or related to the acquisition or disposal of a business or assets or related to a change in accounting principles.
|
(a)
|
Performance
. If the Employee remains employed with the Company or its Subsidiaries and has not experienced a Termination that triggers forfeiture, then, as of the applicable vesting event specified below:
|
(i)
|
______ of the Units may be earned on Vesting Event 1, as determined in accordance with the Schedule;
|
(ii)
|
______ of the Units may be earned on Vesting Event 2, as determined in accordance with the Schedule;
|
(iii)
|
______ of the Units may be earned on Vesting Event 3, as determined in accordance with the Schedule;
|
(iv)
|
______ of the Units may be earned on Vesting Event 4, as determined in accordance with the Schedule; and
|
(v)
|
______ of the Units may be earned on Vesting Event 5, as determined in accordance with the Schedule;
|
(b)
|
Death
. In the event of the Employee’s Termination due to death, any Units not previously vested will vest without adjustment and be settled (for the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution) in the form of Shares as soon as administratively possible after, and effective as of, the date of death.
|
(c)
|
Disability
. In the event of the Employee’s Termination due to Disability, any Units not previously vested will vest without adjustment and be settled in the form of Shares as soon as administratively possible after, and effective as of, the date of Termination due to Disability.
|
5.
|
Change in Control
. In the event of a Change in Control, the entity surviving such Change in Control or the ultimate parent thereof (referred to herein as the “
Surviving Entity
”) may assume, convert or replace this Award with an award of at least equal value and terms and conditions not less favorable than the terms and conditions provided in this Agreement, in which case the new award will vest according to the terms of the applicable award agreement. If the Surviving Entity does not assume, convert or replace this Award, any Units not previously vested will vest without adjustment on the date of the Change in Control.
|
6.
|
Effect of Certain Bad Acts
.
Any Units not previously settled will be cancelled and forfeited immediately if the Employee engages in activity that constitutes Cause, as determined in the sole opinion and discretion of the Committee or its delegate, whether or not the Employee experiences a Termination or remains employed with the Company or a Subsidiary.
|
7.
|
Forfeiture of Units
. In the event of the Employee’s Termination for any reason other than those set forth in subsection 4(b) or (c) or Section 5, any Units that have not vested as of the date of Termination will be forfeited without consideration to the Employee or the Employee’s Representative. In the event that the Employee is terminated by the Company other than for Cause and in a situation not covered by Section 5, the Company may, in its sole discretion, cause some or all of the Units to remain in effect and subject to vesting in accordance with the provisions of subsection 4(a), in which case such Units will be settled in the form of Shares on the Delivery Date(s) set forth in subsection 4(a) above as if the Employee had remained employed on such dates. In accepting this Award, the Employee acknowledges that in the event of Termination (whether or not in breach of local labor laws), the Employee’s right to vest in the Units, if any, will cease and will not be extended by any notice period mandated under local law (
e.g.
, active employment does not include a period of “garden leave” or similar period pursuant to local law) and that the Company shall have the exclusive discretion to determine when Termination occurs.
|
8.
|
Withholding Taxes
. To the extent permitted under applicable law and by the Company, the Employee may satisfy any federal, state, local or other applicable taxes arising from the grant of the Award, the vesting of Units or the delivery of Shares pursuant to this Agreement by:
|
(a)
|
tendering a cash payment;
|
(b)
|
having the Company withhold Shares from the Shares to be delivered to satisfy the applicable withholding tax;
|
(c)
|
tendering Shares received in connection with the Award back to the Company; or
|
(d)
|
delivering other previously acquired Shares having a Fair Market Value approximately equal to the amount to be withheld.
|
9.
|
No Right to Continued Employment
. This Agreement and the Employee’s participation in the Program do not and shall not be interpreted to:
|
(a)
|
form an employment contract or relationship with the Company or its Subsidiaries;
|
(b)
|
confer upon the Employee any right to continue in the employ of the Company or any of its Subsidiaries; or
|
(c)
|
interfere with the ability of the Company or its Subsidiaries to terminate the Employee’s employment at any time.
|
10.
|
Nature of Grant
. In accepting this Award, the Employee acknowledges that:
|
(a)
|
The Program is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
|
(b)
|
This Award is a one-time benefit and does not create any contractual or other right to receive future grants of Units, benefits in lieu of Units, or other Program Benefits in the future, even if Units have been granted repeatedly in the past;
|
(c)
|
All decisions with respect to future Unit grants, if any, and their terms and conditions, will be made by the Company, in its sole discretion;
|
(d)
|
Nothing contained in this Agreement is intended to create or enlarge any other contractual obligations between the Company and the Employee;
|
(e)
|
The Employee is voluntarily participating in the Program;
|
(f)
|
The Units and Shares subject to the Units are:
|
(i)
|
extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or its Subsidiaries, and are outside the scope of the Employee’s employment contract, if any;
|
(ii)
|
not intended to replace any pension rights or compensation;
|
(iii)
|
not part of the Employee’s normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, pension or retirement or welfare benefits, or similar payments and in no event should they be considered as compensation for, or relating in any way to, past services for the Company or any of its Subsidiaries;
|
(g)
|
The future value of the Shares underlying the Units is unknown and cannot be predicted with certainty;
|
(h)
|
In consideration of the Award, no claim or entitlement to compensation or damages shall arise from the Units resulting from Termination (for any reason whatsoever) and the Employee irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if any such claim is found by a court of competent jurisdiction to have arisen, then, by signing or electronically accepting this Agreement, the Employee shall be deemed irrevocably to have waived the Employee’s entitlement to pursue such claim;
|
(i)
|
The Units and the Benefits under the Program, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability; and
|
(j)
|
Neither the Company nor any of its Subsidiaries shall be liable for any change in value of the Units, the amount realized upon settlement of the Units or the amount realized upon a subsequent sale of any Shares acquired upon settlement of the Units, resulting from any fluctuation of the United States Dollar/local currency foreign exchange rate.
|
11.
|
Data Privacy
.
|
(a)
|
Pursuant to applicable personal data protection laws, the collection, processing and transfer of the Employee’s personal Data is necessary for the Company’s administration of the Program and the Employee’s participation in the Program. The Employee’s denial and/or objection to the collection, processing and transfer of personal Data may affect his or her ability to participate in the Program. As such (where required under applicable law), the Employee:
|
(i)
|
voluntarily acknowledges, consents and agrees to the collection, use, processing and transfer of personal Data as described herein; and
|
(ii)
|
authorizes Data recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Employee’s participation in the Program, including any requisite transfer of such Data as may be required for the administration of the Program and/or the subsequent holding of Shares on the Employee’s behalf to a broker or other third party with whom the Employee may elect to deposit any Shares acquired pursuant to the Program.
|
(b)
|
Data may be provided by the Employee or collected, where lawful, from third parties, and the Company and the Subsidiary that employs the Employee (if applicable) will process the Data for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Program. Data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Employee’s country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. The Data will be accessible within the Company’s organization only by those
|
(c)
|
The Company and the Subsidiary that employs the Employee (if applicable) will transfer Data as necessary for the purpose of implementation, administration and management of the Employee’s participation in the Program, and the Company and the Subsidiary that employs the Employee (if applicable) may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Program. These recipients may be located throughout the world.
|
(d)
|
The Employee may, at any time, exercise his or her rights provided under applicable personal data protection laws, which may include the right to:
|
(i)
|
obtain confirmation as to the existence of the Data;
|
(ii)
|
verify the content, origin and accuracy of the Data;
|
(iii)
|
request the integration, update, amendment, deletion or blockage (for breach of applicable laws) of the Data; and
|
(iv)
|
oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Program and the Employee’s participation in the Program.
|
12.
|
Form of Payment.
The Company may, in its sole discretion, settle the Employee’s Units in the form of a cash payment to the extent settlement in Shares: (a) is prohibited under local law; (b) would require the Employee, the Company and/or its Subsidiaries to obtain the approval of any governmental and/or regulatory body in the Employee’s country; (c) would result in adverse tax consequences for the Employee or the Company; or (d) is administratively burdensome. Alternatively, the Company may, in its sole discretion, settle the Employee’s Units in the form of Shares but require the Employee to sell such Shares immediately or within a specified period of time following the Employee’s Termination (in which case, this Agreement shall give the Company the authority to issue sales instructions on the Employee’s behalf).
|
13.
|
Private Placement.
This Award is not intended to be a public offering of securities in the Employee’s country. The Company has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and this Award is not subject to the supervision of the local securities authorities.
|
14.
|
Exchange Controls.
As a condition to this Award, the Employee agrees to comply with any applicable foreign exchange rules and regulations.
|
15.
|
Compliance with Applicable Laws and Regulations
.
|
(a)
|
The Company shall not be required to issue or deliver any Shares pursuant to this Agreement pending compliance with all applicable federal and state securities and other laws (including any registration requirements or tax withholding requirements) and compliance with the rules and practices of any stock exchange upon which the Company’s Shares are listed.
|
(b)
|
Regardless of any action the Company or its Subsidiaries take with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Employee’s participation in the Program and legally applicable to the Employee or deemed by the Company or its Subsidiaries to be an appropriate charge to the Employee even if technically due by the Company or its Subsidiaries (“
Tax-Related Items
”), the Employee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and may exceed the amount actually withheld by the Company or its Subsidiaries. The Employee further acknowledges that the Company and/or its Subsidiaries: (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including, but not limited to, the grant, vesting or settlement of the Units, the issuance of Shares upon payment of the Units, the subsequent sale of Shares acquired pursuant to such issuance and the receipt of any dividends and/or Dividend Equivalents; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate the Employee’s liability for Tax-Related Items or achieve any particular tax result. If the Employee has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, the Employee acknowledges that the Company and/or its Subsidiaries may be required to withhold or account for Tax-Related Items in more than one jurisdiction. If the Employee relocates to another country, the Company may establish special or alternative terms and conditions as necessary or advisable to comply with local laws, rules or regulations, to facilitate the operation and administration of the Award and the Program and/or to accommodate the Employee’s relocation.
|
(c)
|
The Employee’s country of residence may have insider trading and/or market abuse laws that may affect the Employee’s ability to acquire or sell Shares under the Program during such times the Employee is considered to have “inside information” (as defined under the laws in the Employee’s country). These laws may be the same or different from any Company insider trading policy. The Employee acknowledges that it is the Employee’s responsibility to be informed of and compliant with such regulations, and the Employee is advised to speak to the Employee’s personal advisor on this matter.
|
16.
|
Code Section 409A
. Payments made pursuant to this Agreement are intended to be exempt from or otherwise to comply with the provisions of Code Section 409A to the extent applicable. The Program and this Agreement shall be administered and interpreted in a manner consistent with this intent. If the Company determines that any payments under this Agreement are subject to Code Section 409A and this Agreement fails to comply with that section’s requirements, the Company may, at the Company’s sole discretion, and without the Employee’s consent, amend this Agreement to cause it to comply with Code Section 409A or otherwise be exempt from Code Section 409A.
|
17.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Award, the Employee’s participation in the Program or the Employee’s acquisition or sale of the underlying Shares. The Employee is hereby advised to consult with the Employee’s own personal tax, legal and financial advisors regarding participation in the Program before taking any action related to the Program.
|
18.
|
Imposition of Other Requirements
. The Company reserves the right to impose other requirements on the Employee’s participation in the Program, on the Units and on any Shares acquired under the Program, to the extent the Company or any Subsidiary determines it is necessary or advisable to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Units and the Program, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Employee agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Employee’s country. In addition, the Employee agrees to take any and all actions as may be required to comply with the Employee’s personal obligations under local laws, rules and regulations in the Employee’s country.
|
19.
|
Determinations
. Each decision, determination, interpretation or other action made or taken pursuant to the provisions of this Agreement by the Company, the Committee or any delegate of the Committee shall be final, conclusive and binding for all purposes and upon all persons, including, without limitation, the Company, the Employee, the Employee’s Representative, and the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution.
|
20.
|
Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Program by electronic means. The Employee hereby consents to receive such documents by electronic delivery and agrees to participate in the Program through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
|
21.
|
Addendum
. This Award shall be subject to any special terms and conditions set forth in any Addendum to this Agreement for the Employee’s country. Moreover, if the Employee relocates to one of the countries included in the Addendum, the special terms and conditions for such country will apply to the Employee, to
|
22.
|
Severability
. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. To the extent a court or tribunal of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, in whole or in part, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
|
23.
|
Entire Agreement.
This Agreement and the Program constitute the entire agreement between the Employee and the Company regarding the Award and supersede all prior and contemporaneous agreements and understandings, oral or written, between the parties regarding the Award. Except as expressly set forth herein, this Agreement (and any provision of this Agreement) may not be modified, changed, clarified, or interpreted by the parties, except in a writing specifying the modification, change, clarification, or interpretation, and signed by a duly authorized Company officer.
|
24.
|
Succession
. This Agreement shall be binding upon and operate for the benefit of the Company and its successors and assigns, and the Employee, the Employee’s Representative, and the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution.
|
25.
|
Language
. If the Employee has received this Agreement or any other document related to the Program translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
26.
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any state’s conflict of laws principles.
|
|
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
Ratio of earnings to fixed charges
|
|
7.3
|
|
7.4
|
|
8.0
|
|
6.0
|
|
16.6
|
|
(in millions, except for ratio)
|
|
Year
ended
December 31, 2017
|
|
Year
ended
December 31, 2016
|
|
Year
ended
December 31, 2015
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Determination of earnings:
|
|
|
|
|
|
|
|
||||||
Earnings before income tax
|
|
$
|
7,727
|
|
|
$
|
7,884
|
|
|
$
|
6,645
|
|
|
Add (deduct):
|
|
|
|
|
|
|
|
||||||
Fixed charges
|
|
1,222
|
|
|
1,222
|
|
|
923
|
|
|
|||
Interest capitalized during period (a)
|
|
(5
|
)
|
|
(112
|
)
|
|
(143
|
)
|
|
|||
Total earnings as defined
|
|
$
|
8,944
|
|
|
$
|
8,994
|
|
|
$
|
7,425
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed charges:
|
|
|
|
|
|
|
|
||||||
Interest expense
|
|
$
|
1,150
|
|
|
$
|
1,155
|
|
|
$
|
860
|
|
|
Capitalized interest
|
|
16
|
|
|
14
|
|
|
14
|
|
|
|||
Rent expense (b)
|
|
56
|
|
|
53
|
|
|
49
|
|
|
|||
Total fixed charges
|
|
$
|
1,222
|
|
|
$
|
1,222
|
|
|
$
|
923
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of earnings to fixed charges
|
|
7.3
|
|
|
7.4
|
|
|
8.0
|
|
|
Domestic Subsidiaries
|
|
Incorporation
|
|
|
|
AbbVie Biopharmaceuticals LLC
|
|
Delaware
|
|
|
|
AbbVie Bioresearch Center Inc.
|
|
Delaware
|
|
|
|
AbbVie Biotech Ventures Inc.
|
|
Delaware
|
|
|
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AbbVie Biotherapeutics Inc.
|
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Delaware
|
|
|
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AbbVie Endocrine Inc.
|
|
Delaware
|
|
|
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AbbVie Endocrinology Inc.
|
|
Delaware
|
|
|
|
AbbVie Holdings Inc.
|
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Delaware
|
|
|
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AbbVie Pharmaceuticals LLC
|
|
Delaware
|
|
|
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AbbVie Products LLC
|
|
Georgia
|
|
|
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AbbVie Purchasing LLC
|
|
Delaware
|
|
|
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AbbVie Resources Inc.
|
|
Delaware
|
|
|
|
AbbVie Resources International Inc.
|
|
Delaware
|
|
|
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AbbVie Respiratory LLC
|
|
Delaware
|
|
|
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AbbVie Stemcentrx LLC
|
|
Delaware
|
|
|
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AbbVie US Holdings LLC
|
|
Delaware
|
|
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AbbVie US LLC
|
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Delaware
|
|
|
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AbbVie Ventures LLC
|
|
Delaware
|
|
|
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Aeropharm Technology, LLC
|
|
Delaware
|
|
|
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BioDisplay Technologies, Inc.
|
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Illinois
|
|
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Fremont Holding L.L.C.
|
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Delaware
|
|
|
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IEP Pharmaceutical Devices, LLC
|
|
Delaware
|
|
|
|
Knoll Pharmaceutical Company
|
|
New Jersey
|
|
|
|
KOS Pharmaceuticals, Inc.
|
|
Delaware
|
|
|
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Life Properties Inc.
|
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Delaware
|
|
|
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Organics L.L.C.
|
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Delaware
|
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Pharmacyclics LLC
|
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Delaware
|
|
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Rowell Laboratories, Inc.
|
|
Minnesota
|
|
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Sapphire Merger Sub, Inc.
|
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Delaware
|
|
|
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Unimed Pharmaceuticals, LLC
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Delaware
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Foreign Subsidiaries
|
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Incorporation
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AbbVie S.A.
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Argentina
|
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AbbVie Pty Ltd
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Australia
|
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AbbVie GmbH
|
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Austria
|
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AbbVie Bahamas Ltd.
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Bahamas
|
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AbbVie SA
|
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Belgium
|
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AbbVie Ltd
|
|
Bermuda
|
|
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AbbVie Biotechnology Ltd
|
|
Bermuda
|
|
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AbbVie Holdings Unlimited
|
|
Bermuda
|
|
|
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AbbVie d.o.o.
|
|
Bosnia
|
|
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AbbVie Farmacêutica Ltda.
|
|
Brazil
|
|
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AbbVie Participações Ltda.
|
|
Brazil
|
|
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AbbVie EOOD
|
|
Bulgaria
|
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AbbVie Corporation
|
|
Canada
|
|
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AbbVie Holdings Corporation
|
|
Canada
|
|
|
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Pharmacyclics Cayman Ltd.
|
|
Cayman Islands
|
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Stemcentrx Cayman Ltd.
|
|
Cayman Islands
|
|
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AbbVie Productos Farmacéuticos Limitada
|
|
Chile
|
|
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AbbVie Pharmaceutical Trading (Shanghai) Co., Ltd.
|
|
China
|
|
|
|
Pharmacyclics (Shanghai) Management Consulting Services Limited
|
|
China
|
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AbbVie S.A.S.
|
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Colombia
|
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AbbVie d.o.o.
|
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Croatia
|
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AbbVie Limited
|
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Cyprus
|
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AbbVie s.r.o.
|
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Czech Republic
|
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AbbVie A/S
|
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Denmark
|
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AbbVie, S.R.L.
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Dominican Republic
|
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AbbVie L.L.C.
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Egypt
|
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AbbVie Oy
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Finland
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AbbVie SAS
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France
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AbbVie Holdings SAS
|
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France
|
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Abbott Products GmbH
|
|
Germany
|
|
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AbbVie Biotechnology GmbH
|
|
Germany
|
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AbbVie Deutschland GmbH & Co. KG
|
|
Germany
|
|
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AbbVie Komplementär GmbH
|
|
Germany
|
|
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AbbVie Real Estate Management GmbH
|
|
Germany
|
|
|
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AbbVie (Gibraltar) Holdings Limited
|
|
Gibraltar
|
|
|
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AbbVie (Gibraltar) Limited
|
|
Gibraltar
|
|
|
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AbbVie Pharmaceuticals Societe Anonyme
|
|
Greece
|
|
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AbbVie, S.A.
|
|
Guatemala
|
AbbVie Limited
|
|
Hong Kong
|
|
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AbbVie Kft.
|
|
Hungary
|
|
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AbbVie Biopharmaceuticals Private Limited
|
|
India
|
|
|
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AbbVie Ireland Holdings Limited
|
|
Ireland
|
|
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AbbVie Ireland Unlimited Company
|
|
Ireland
|
|
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AbbVie Limited
|
|
Ireland
|
|
|
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AbbVie Manufacturing Management Limited
|
|
Ireland
|
|
|
|
Fournier Laboratories Ireland Ltd.
|
|
Ireland
|
|
|
|
Pharmacyclics (Europe) Limited
|
|
Ireland
|
|
|
|
AbbVie Biopharmaceuticals Ltd.
|
|
Israel
|
|
|
|
AbbVie S.r.l.
|
|
Italy
|
|
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AbbVie GK
|
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Japan
|
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AbbVie Holdings KK
|
|
Japan
|
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AbbVie UK Biopharmaceuticals Ltd
|
|
Jersey
|
|
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AbbVie UK Ltd
|
|
Jersey
|
|
|
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AbbVie Ltd
|
|
Korea, South
|
|
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AbbVie SIA
|
|
Latvia
|
|
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AbbVie UAB
|
|
Lithuania
|
|
|
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AbbVie (Gibraltar) Holdings Limited Luxembourg S.C.S.
|
|
Luxembourg
|
|
|
|
AbbVie International S.à r.l.
|
|
Luxembourg
|
|
|
|
AbbVie Investments S.à r.l.
|
|
Luxembourg
|
|
|
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AbbVie Overseas S.à r.l.
|
|
Luxembourg
|
|
|
|
AbbVie S.à r.l.
|
|
Luxembourg
|
|
|
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AbbVie Sdn. Bhd.
|
|
Malaysia
|
|
|
|
AbbVie Farmacéuticos, S.A. de C.V.
|
|
Mexico
|
|
|
|
AbbVie B.V.
|
|
Netherlands
|
|
|
|
AbbVie Central Finance B.V.
|
|
Netherlands
|
|
|
|
AbbVie Finance B.V.
|
|
Netherlands
|
|
|
|
AbbVie Ireland NL B.V.
|
|
Netherlands
|
|
|
|
AbbVie Japan Holdings B.V.
|
|
Netherlands
|
|
|
|
AbbVie Logistics B.V
|
|
Netherlands
|
|
|
|
AbbVie Nederland Holdings B.V.
|
|
Netherlands
|
|
|
|
AbbVie Pharmaceuticals B.V.
|
|
Netherlands
|
|
|
|
AbbVie Research B.V.
|
|
Netherlands
|
|
|
|
AbbVie Venezuela B.V.
|
|
Netherlands
|
|
|
|
AbbVie Venezuela Holdings B.V.
|
|
Netherlands
|
|
|
|
AbbVie Limited
|
|
New Zealand
|
|
|
|
AbbVie AS
|
|
Norway
|
|
|
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AbbVie, S. de R.L.
|
|
Panama
|
|
|
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AbbVie Polska Sp. z o.o.
|
|
Poland
|
|
|
|
AbbVie Sp. z o.o.
|
|
Poland
|
|
|
|
AbbVie, L.da
|
|
Portugal
|
|
|
|
AbbVie Promoção, L.da
|
|
Portugal
|
|
|
|
AbbVie Corp
|
|
Puerto Rico
|
|
|
|
Knoll LLC
|
|
Puerto Rico
|
|
|
|
S.C. AbbVie S.R.L.
|
|
Romania
|
|
|
|
AbbVie Limited Liability Company
|
|
Russia
|
|
|
|
AbbVie Operations Singapore Pte. Ltd.
|
|
Singapore
|
|
|
|
AbbVie Pte. Ltd.
|
|
Singapore
|
|
|
|
AbbVie Holdings s.r.o.
|
|
Slovakia
|
|
|
|
AbbVie s.r.o.
|
|
Slovakia
|
|
|
|
AbbVie Biofarmacevtska družba d.o.o.
|
|
Slovenia
|
|
|
|
AbbVie (Pty) Ltd.
|
|
South Africa
|
|
|
|
AbbVie Spain, S.L.
|
|
Spain
|
|
|
|
Fundación AbbVie
|
|
Spain
|
|
|
|
AbbVie AB
|
|
Sweden
|
|
|
|
AbbVie AG
|
|
Switzerland
|
|
|
|
AbbVie Biopharmaceuticals GmbH
|
|
Switzerland
|
|
|
|
Pharmacyclics Switzerland GmbH
|
|
Switzerland
|
|
|
|
AbbVie Ltd.
|
|
Thailand
|
|
|
|
AbbVie Sarl
|
|
Tunisia
|
|
|
|
AbbVie Tıbbi İlaçlar Sanayi ve Ticaret Limited Şirketi
|
|
Turkey
|
|
|
|
AbbVie Australasia Holdings Limited
|
|
United Kingdom
|
|
|
|
AbbVie Biotherapeutics Limited
|
|
United Kingdom
|
|
|
|
AbbVie Investments Limited
|
|
United Kingdom
|
|
|
|
AbbVie Ltd
|
|
United Kingdom
|
|
|
|
AbbVie Trustee Company Limited
|
|
United Kingdom
|
|
|
|
AbbVie UK Holdco Limited
|
|
United Kingdom
|
|
|
|
AbbVie S.A.
|
|
Uruguay
|
|
|
|
AbbVie Pharmaceuticals SCA
|
|
Venezuela
|
|
|
|
Consent of Independent Registered Public Accounting Firm
|
1.
|
I have reviewed this annual report on Form 10-K of AbbVie Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of AbbVie as of, and for, the periods presented in this report;
|
4.
|
AbbVie’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for AbbVie and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to AbbVie, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of AbbVie’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in AbbVie’s internal control over financial reporting that occurred during AbbVie’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, AbbVie’s internal control over financial reporting; and
|
5.
|
AbbVie’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to AbbVie’s auditors and the audit committee of AbbVie’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect AbbVie’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in AbbVie’s internal control over financial reporting.
|
Date: February 16, 2018
|
/s/ Richard A. Gonzalez
|
|
Richard A. Gonzalez, Chairman of the Board
and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of AbbVie Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of AbbVie as of, and for, the periods presented in this report;
|
4.
|
AbbVie’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for AbbVie and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to AbbVie, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of AbbVie’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in AbbVie’s internal control over financial reporting that occurred during AbbVie’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, AbbVie’s internal control over financial reporting; and
|
5.
|
AbbVie’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to AbbVie’s auditors and the audit committee of AbbVie’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect AbbVie’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in AbbVie’s internal control over financial reporting.
|
Date: February 16, 2018
|
/s/ William J. Chase
|
|
William J. Chase, Executive Vice President,
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Richard A. Gonzalez
|
Richard A. Gonzalez
Chairman of the Board and
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ William J. Chase
|
William J. Chase
Executive Vice President, Chief Financial Officer
|