(Exact name of registrant as specified in its charter)
|
||
Delaware
|
|
32-0375147
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. employer identification number)
|
Large Accelerated Filer
|
☒
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
|
ABBV
|
|
New York Stock Exchange
|
|
|
|
|
Chicago Stock Exchange
|
1.375% Senior Notes due 2024
|
|
ABBV24
|
|
New York Stock Exchange
|
0.750% Senior Notes due 2027
|
|
ABBV27
|
|
New York Stock Exchange
|
2.125% Senior Notes due 2028
|
|
ABBV28
|
|
New York Stock Exchange
|
1.250% Senior Notes due 2031
|
|
ABBV31
|
|
New York Stock Exchange
|
|
|
Page
|
|
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
2019 Form 10-Q |
|
1
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenues
|
|
$
|
8,479
|
|
|
$
|
8,236
|
|
|
$
|
24,562
|
|
|
$
|
24,448
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of products sold
|
|
1,920
|
|
|
1,835
|
|
|
5,433
|
|
|
5,696
|
|
||||
Selling, general and administrative
|
|
1,657
|
|
|
1,919
|
|
|
4,991
|
|
|
5,470
|
|
||||
Research and development
|
|
2,285
|
|
|
1,268
|
|
|
4,865
|
|
|
3,834
|
|
||||
Acquired in-process research and development
|
|
—
|
|
|
55
|
|
|
246
|
|
|
124
|
|
||||
Other expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
||||
Total operating costs and expenses
|
|
5,862
|
|
|
5,077
|
|
|
15,535
|
|
|
15,624
|
|
||||
Operating earnings
|
|
2,617
|
|
|
3,159
|
|
|
9,027
|
|
|
8,824
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
420
|
|
|
302
|
|
|
1,054
|
|
|
825
|
|
||||
Net foreign exchange loss
|
|
19
|
|
|
2
|
|
|
31
|
|
|
18
|
|
||||
Other expense, net
|
|
177
|
|
|
94
|
|
|
2,590
|
|
|
411
|
|
||||
Earnings before income tax expense
|
|
2,001
|
|
|
2,761
|
|
|
5,352
|
|
|
7,570
|
|
||||
Income tax expense
|
|
117
|
|
|
14
|
|
|
271
|
|
|
57
|
|
||||
Net earnings
|
|
$
|
1,884
|
|
|
$
|
2,747
|
|
|
$
|
5,081
|
|
|
$
|
7,513
|
|
|
|
|
|
|
|
|
|
|
||||||||
Per share data
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
1.27
|
|
|
$
|
1.81
|
|
|
$
|
3.41
|
|
|
$
|
4.81
|
|
Diluted earnings per share
|
|
$
|
1.26
|
|
|
$
|
1.81
|
|
|
$
|
3.41
|
|
|
$
|
4.79
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average basic shares outstanding
|
|
1,481
|
|
|
1,511
|
|
|
1,480
|
|
|
1,556
|
|
||||
Weighted-average diluted shares outstanding
|
|
1,483
|
|
|
1,515
|
|
|
1,483
|
|
|
1,561
|
|
2019 Form 10-Q |
|
2
|
2019 Form 10-Q |
|
3
|
(in millions, except share data)
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and equivalents
|
$
|
10,648
|
|
|
$
|
7,289
|
|
Short-term investments
|
—
|
|
|
772
|
|
||
Accounts receivable, net
|
5,529
|
|
|
5,384
|
|
||
Inventories
|
1,929
|
|
|
1,605
|
|
||
Prepaid expenses and other
|
2,060
|
|
|
1,895
|
|
||
Total current assets
|
20,166
|
|
|
16,945
|
|
||
|
|
|
|
||||
Investments
|
131
|
|
|
1,420
|
|
||
Property and equipment, net
|
2,894
|
|
|
2,883
|
|
||
Intangible assets, net
|
19,036
|
|
|
21,233
|
|
||
Goodwill
|
15,537
|
|
|
15,663
|
|
||
Other assets
|
1,677
|
|
|
1,208
|
|
||
Total assets
|
$
|
59,441
|
|
|
$
|
59,352
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
3,699
|
|
Current portion of long-term debt and finance lease obligations
|
5,276
|
|
|
1,609
|
|
||
Accounts payable and accrued liabilities
|
12,217
|
|
|
11,931
|
|
||
Total current liabilities
|
17,493
|
|
|
17,239
|
|
||
|
|
|
|
||||
Long-term debt and finance lease obligations
|
33,126
|
|
|
35,002
|
|
||
Deferred income taxes
|
1,058
|
|
|
1,067
|
|
||
Other long-term liabilities
|
15,990
|
|
|
14,490
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity (deficit)
|
|
|
|
||||
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,781,429,626 shares issued as of September 30, 2019 and 1,776,510,871 as of December 31, 2018
|
18
|
|
|
18
|
|
||
Common stock held in treasury, at cost, 302,647,520 shares as of September 30, 2019 and 297,686,473 as of December 31, 2018
|
(24,501
|
)
|
|
(24,108
|
)
|
||
Additional paid-in capital
|
15,112
|
|
|
14,756
|
|
||
Retained earnings
|
3,673
|
|
|
3,368
|
|
||
Accumulated other comprehensive loss
|
(2,528
|
)
|
|
(2,480
|
)
|
||
Total stockholders’ equity (deficit)
|
(8,226
|
)
|
|
(8,446
|
)
|
||
|
|
|
|
||||
Total liabilities and equity
|
$
|
59,441
|
|
|
$
|
59,352
|
|
2019 Form 10-Q |
|
4
|
(in millions)
|
Common shares outstanding
|
|
Common stock
|
|
Treasury stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||||
Balance at June 30, 2018
|
1,514
|
|
|
$
|
18
|
|
|
$
|
(20,845
|
)
|
|
$
|
14,596
|
|
|
$
|
5,495
|
|
|
$
|
(2,639
|
)
|
|
$
|
(3,375
|
)
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,747
|
|
|
—
|
|
|
2,747
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|
80
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,453
|
)
|
|
—
|
|
|
(1,453
|
)
|
||||||
Purchases of treasury stock
|
(10
|
)
|
|
—
|
|
|
(1,009
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,009
|
)
|
||||||
Stock-based compensation plans and other
|
—
|
|
|
—
|
|
|
5
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
89
|
|
||||||
Balance at September 30, 2018
|
1,504
|
|
|
$
|
18
|
|
|
$
|
(21,849
|
)
|
|
$
|
14,680
|
|
|
$
|
6,789
|
|
|
$
|
(2,559
|
)
|
|
$
|
(2,921
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2019
|
1,478
|
|
|
$
|
18
|
|
|
$
|
(24,505
|
)
|
|
$
|
15,028
|
|
|
$
|
3,384
|
|
|
$
|
(2,491
|
)
|
|
$
|
(8,566
|
)
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,884
|
|
|
—
|
|
|
1,884
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,595
|
)
|
|
—
|
|
|
(1,595
|
)
|
||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Stock-based compensation plans and other
|
1
|
|
|
—
|
|
|
7
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
91
|
|
||||||
Balance at September 30, 2019
|
1,479
|
|
|
$
|
18
|
|
|
$
|
(24,501
|
)
|
|
$
|
15,112
|
|
|
$
|
3,673
|
|
|
$
|
(2,528
|
)
|
|
$
|
(8,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2017
|
1,592
|
|
|
$
|
18
|
|
|
$
|
(11,923
|
)
|
|
$
|
14,270
|
|
|
$
|
5,459
|
|
|
$
|
(2,727
|
)
|
|
$
|
5,097
|
|
Adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,733
|
)
|
|
—
|
|
|
(1,733
|
)
|
||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,513
|
|
|
—
|
|
|
7,513
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|
168
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,450
|
)
|
|
—
|
|
|
(4,450
|
)
|
||||||
Purchases of treasury stock
|
(95
|
)
|
|
—
|
|
|
(9,956
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,956
|
)
|
||||||
Stock-based compensation plans and other
|
7
|
|
|
—
|
|
|
30
|
|
|
410
|
|
|
—
|
|
|
—
|
|
|
440
|
|
||||||
Balance at September 30, 2018
|
1,504
|
|
|
$
|
18
|
|
|
$
|
(21,849
|
)
|
|
$
|
14,680
|
|
|
$
|
6,789
|
|
|
$
|
(2,559
|
)
|
|
$
|
(2,921
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2018
|
1,479
|
|
|
$
|
18
|
|
|
$
|
(24,108
|
)
|
|
$
|
14,756
|
|
|
$
|
3,368
|
|
|
$
|
(2,480
|
)
|
|
$
|
(8,446
|
)
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,081
|
|
|
—
|
|
|
5,081
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(48
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,776
|
)
|
|
—
|
|
|
(4,776
|
)
|
||||||
Purchases of treasury stock
|
(5
|
)
|
|
—
|
|
|
(425
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(425
|
)
|
||||||
Stock-based compensation plans and other
|
5
|
|
|
—
|
|
|
32
|
|
|
356
|
|
|
—
|
|
|
—
|
|
|
388
|
|
||||||
Balance at September 30, 2019
|
1,479
|
|
|
$
|
18
|
|
|
$
|
(24,501
|
)
|
|
$
|
15,112
|
|
|
$
|
3,673
|
|
|
$
|
(2,528
|
)
|
|
$
|
(8,226
|
)
|
2019 Form 10-Q |
|
5
|
|
Nine months ended
September 30, |
||||||
(in millions) (brackets denote cash outflows)
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net earnings
|
$
|
5,081
|
|
|
$
|
7,513
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
||||
Depreciation
|
346
|
|
|
349
|
|
||
Amortization of intangible assets
|
1,162
|
|
|
974
|
|
||
Change in fair value of contingent consideration liabilities
|
2,653
|
|
|
432
|
|
||
Stock-based compensation
|
351
|
|
|
351
|
|
||
Upfront costs and milestones related to collaborations
|
341
|
|
|
711
|
|
||
Intangible asset impairment
|
1,030
|
|
|
—
|
|
||
Other, net
|
92
|
|
|
423
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(207
|
)
|
|
(806
|
)
|
||
Inventories
|
(401
|
)
|
|
(367
|
)
|
||
Prepaid expenses and other assets
|
183
|
|
|
(426
|
)
|
||
Accounts payable and other liabilities
|
(582
|
)
|
|
881
|
|
||
Cash flows from operating activities
|
10,049
|
|
|
10,035
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Acquisitions and investments
|
(476
|
)
|
|
(541
|
)
|
||
Acquisitions of property and equipment
|
(389
|
)
|
|
(515
|
)
|
||
Purchases of investment securities
|
(579
|
)
|
|
(1,581
|
)
|
||
Sales and maturities of investment securities
|
2,655
|
|
|
1,914
|
|
||
Cash flows from investing activities
|
1,211
|
|
|
(723
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Net change in commercial paper borrowings
|
(699
|
)
|
|
(400
|
)
|
||
Proceeds from issuance of other short-term borrowings
|
—
|
|
|
3,002
|
|
||
Repayments of other short-term borrowings
|
(3,000
|
)
|
|
—
|
|
||
Proceeds from issuance of long-term debt
|
1,534
|
|
|
5,963
|
|
||
Repayments of long-term debt and finance lease obligations
|
(5
|
)
|
|
(5,021
|
)
|
||
Debt issuance costs
|
(248
|
)
|
|
(34
|
)
|
||
Dividends paid
|
(4,771
|
)
|
|
(4,129
|
)
|
||
Purchases of treasury stock
|
(627
|
)
|
|
(9,956
|
)
|
||
Proceeds from the exercise of stock options
|
6
|
|
|
66
|
|
||
Payments of contingent consideration liabilities
|
(120
|
)
|
|
(78
|
)
|
||
Other, net
|
36
|
|
|
16
|
|
||
Cash flows from financing activities
|
(7,894
|
)
|
|
(10,571
|
)
|
||
Effect of exchange rate changes on cash and equivalents
|
(7
|
)
|
|
(29
|
)
|
||
Net change in cash and equivalents
|
3,359
|
|
|
(1,288
|
)
|
||
Cash and equivalents, beginning of period
|
7,289
|
|
|
9,303
|
|
||
|
|
|
|
||||
Cash and equivalents, end of period
|
$
|
10,648
|
|
|
$
|
8,015
|
|
2019 Form 10-Q |
|
6
|
|
2019 Form 10-Q |
|
7
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense
|
|
$
|
480
|
|
|
$
|
339
|
|
|
$
|
1,225
|
|
|
$
|
968
|
|
Interest income
|
|
(60
|
)
|
|
(37
|
)
|
|
(171
|
)
|
|
(143
|
)
|
||||
Interest expense, net
|
|
$
|
420
|
|
|
$
|
302
|
|
|
$
|
1,054
|
|
|
$
|
825
|
|
(in millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
449
|
|
|
$
|
473
|
|
Work-in-process
|
1,120
|
|
|
862
|
|
||
Raw materials
|
360
|
|
|
270
|
|
||
Inventories
|
$
|
1,929
|
|
|
$
|
1,605
|
|
(in millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Property and equipment, gross
|
$
|
8,492
|
|
|
$
|
8,396
|
|
Accumulated depreciation
|
(5,598
|
)
|
|
(5,513
|
)
|
||
Property and equipment, net
|
$
|
2,894
|
|
|
$
|
2,883
|
|
|
2019 Form 10-Q |
|
8
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
|
$
|
1,884
|
|
|
$
|
2,747
|
|
|
$
|
5,081
|
|
|
$
|
7,513
|
|
Earnings allocated to participating securities
|
|
10
|
|
|
12
|
|
|
27
|
|
|
34
|
|
||||
Earnings available to common shareholders
|
|
$
|
1,874
|
|
|
$
|
2,735
|
|
|
$
|
5,054
|
|
|
$
|
7,479
|
|
Weighted-average basic shares outstanding
|
|
1,481
|
|
|
1,511
|
|
|
1,480
|
|
|
1,556
|
|
||||
Basic earnings per share
|
|
$
|
1.27
|
|
|
$
|
1.81
|
|
|
$
|
3.41
|
|
|
$
|
4.81
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS
|
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
|
$
|
1,884
|
|
|
$
|
2,747
|
|
|
$
|
5,081
|
|
|
$
|
7,513
|
|
Earnings allocated to participating securities
|
|
10
|
|
|
12
|
|
|
27
|
|
|
34
|
|
||||
Earnings available to common shareholders
|
|
$
|
1,874
|
|
|
$
|
2,735
|
|
|
$
|
5,054
|
|
|
$
|
7,479
|
|
Weighted-average shares of common stock outstanding
|
|
1,481
|
|
|
1,511
|
|
|
1,480
|
|
|
1,556
|
|
||||
Effect of dilutive securities
|
|
2
|
|
|
4
|
|
|
3
|
|
|
5
|
|
||||
Weighted-average diluted shares outstanding
|
|
1,483
|
|
|
1,515
|
|
|
1,483
|
|
|
1,561
|
|
||||
Diluted earnings per share
|
|
$
|
1.26
|
|
|
$
|
1.81
|
|
|
$
|
3.41
|
|
|
$
|
4.79
|
|
|
2019 Form 10-Q |
|
9
|
|
2019 Form 10-Q |
|
10
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
United States - Janssen's share of profits (included in cost of products sold)
|
|
$
|
489
|
|
|
$
|
377
|
|
|
$
|
1,297
|
|
|
$
|
978
|
|
International - AbbVie's share of profits (included in net revenues)
|
|
215
|
|
|
160
|
|
|
621
|
|
|
455
|
|
||||
Global - AbbVie's share of other costs (included in respective line items)
|
|
81
|
|
|
81
|
|
|
230
|
|
|
232
|
|
|
(in millions)
|
|
||
Balance as of December 31, 2018
|
$
|
15,663
|
|
Foreign currency translation adjustments
|
(126
|
)
|
|
Balance as of September 30, 2019
|
$
|
15,537
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(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
|
$
|
19,600
|
|
|
$
|
(6,208
|
)
|
|
$
|
13,392
|
|
|
$
|
15,872
|
|
|
$
|
(5,614
|
)
|
|
$
|
10,258
|
|
License agreements
|
7,798
|
|
|
(2,154
|
)
|
|
5,644
|
|
|
7,865
|
|
|
(1,810
|
)
|
|
6,055
|
|
||||||
Total definite-lived intangible assets
|
27,398
|
|
|
(8,362
|
)
|
|
19,036
|
|
|
23,737
|
|
|
(7,424
|
)
|
|
16,313
|
|
||||||
Indefinite-lived research and development
|
—
|
|
|
—
|
|
|
—
|
|
|
4,920
|
|
|
—
|
|
|
4,920
|
|
||||||
Total intangible assets, net
|
$
|
27,398
|
|
|
$
|
(8,362
|
)
|
|
$
|
19,036
|
|
|
$
|
28,657
|
|
|
$
|
(7,424
|
)
|
|
$
|
21,233
|
|
2019 Form 10-Q |
|
11
|
|
(in millions)
|
|
||
Accrued balance as of December 31, 2018
|
$
|
99
|
|
Restructuring charges
|
194
|
|
|
Payments and other adjustments
|
(133
|
)
|
|
Accrued balance as of September 30, 2019
|
$
|
160
|
|
|
2019 Form 10-Q |
|
12
|
(in millions)
|
Balance sheet caption
|
September 30,
2019 |
||
Assets
|
|
|
||
Operating
|
Other assets
|
$
|
357
|
|
Finance
|
Property and equipment, net
|
24
|
|
|
Total lease assets
|
|
$
|
381
|
|
Liabilities
|
|
|
||
Operating
|
|
|
||
Current
|
Accounts payable and accrued liabilities
|
$
|
107
|
|
Noncurrent
|
Other long-term liabilities
|
268
|
|
|
Finance
|
|
|
||
Current
|
Current portion of long-term debt and finance lease obligations
|
7
|
|
|
Noncurrent
|
Long-term debt and finance lease obligations
|
21
|
|
|
Total lease liabilities
|
|
$
|
403
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||
(in millions)
|
|
2019
|
|
2019
|
||||
Operating lease cost
|
|
$
|
30
|
|
|
$
|
94
|
|
Short-term lease cost
|
|
9
|
|
|
24
|
|
||
Variable lease cost
|
|
17
|
|
|
46
|
|
||
Total lease cost
|
|
$
|
56
|
|
|
$
|
164
|
|
|
September 30,
2019 |
|
Weighted-average remaining lease term (in years)
|
|
|
Operating
|
6
|
|
Finance
|
3
|
|
Weighted-average discount rate
|
|
|
Operating
|
4.0
|
%
|
Finance
|
4.0
|
%
|
|
Nine months ended
September 30, |
||
(in millions)
|
2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows from operating leases
|
$
|
94
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
16
|
|
2019 Form 10-Q |
|
13
|
(in millions)
|
Operating
leases
|
|
Finance
leases
|
|
Total (a)(b)
|
||||||
2019
|
$
|
32
|
|
|
$
|
6
|
|
|
$
|
38
|
|
2020
|
116
|
|
|
10
|
|
|
126
|
|
|||
2021
|
99
|
|
|
9
|
|
|
108
|
|
|||
2022
|
56
|
|
|
3
|
|
|
59
|
|
|||
2023
|
35
|
|
|
1
|
|
|
36
|
|
|||
Thereafter
|
80
|
|
|
—
|
|
|
80
|
|
|||
Total lease payments
|
418
|
|
|
29
|
|
|
447
|
|
|||
Less: Interest
|
43
|
|
|
1
|
|
|
44
|
|
|||
Present value of lease liabilities
|
$
|
375
|
|
|
$
|
28
|
|
|
$
|
403
|
|
|
2019 Form 10-Q |
|
14
|
|
Fair value –
Derivatives in asset position |
|
Fair value –
Derivatives in liability position |
||||||||||||
(in millions)
|
Balance sheet caption
|
September 30,
2019 |
December 31, 2018
|
|
Balance sheet caption
|
September 30,
2019 |
December 31, 2018
|
||||||||
Foreign currency forward exchange contracts
|
|
|
|
|
|
|
|
||||||||
Designated as cash flow hedges
|
Prepaid expenses and
other
|
$
|
4
|
|
$
|
113
|
|
|
Accounts payable and accrued liabilities
|
$
|
—
|
|
$
|
—
|
|
Designated as net investment hedges
|
Prepaid expenses and
other |
69
|
|
—
|
|
|
Accounts payable and accrued liabilities
|
—
|
|
—
|
|
||||
Not designated as hedges
|
Prepaid expenses and
other
|
13
|
|
19
|
|
|
Accounts payable and accrued liabilities
|
37
|
|
26
|
|
||||
Treasury rate lock agreements designated as cash flow hedges
|
Prepaid expenses and other
|
123
|
|
—
|
|
|
Accounts payable and accrued liabilities
|
35
|
|
—
|
|
||||
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
|
44
|
|
—
|
|
|
Other long-term liabilities
|
59
|
|
466
|
|
||||
Total derivatives
|
|
$
|
253
|
|
$
|
132
|
|
|
|
$
|
139
|
|
$
|
492
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign currency forward exchange contracts
|
|
|
|
|
|
|
|
|
||||||||
Designated as cash flow hedges
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
122
|
|
Designated as net investment hedges
|
|
59
|
|
|
—
|
|
|
69
|
|
|
—
|
|
||||
Treasury rate lock agreements designated as cash flow hedges
|
|
88
|
|
|
—
|
|
|
88
|
|
|
—
|
|
2019 Form 10-Q |
|
15
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
Statement of earnings caption
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign currency forward exchange contracts
|
|
|
|
|
|
|
|
|
|
||||||||
Designated as cash flow hedges
|
Cost of products sold
|
|
$
|
42
|
|
|
$
|
(54
|
)
|
|
$
|
119
|
|
|
$
|
(144
|
)
|
Designated as net investment hedges
|
Interest expense, net
|
|
10
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Not designated as hedges
|
Net foreign exchange loss
|
|
(55
|
)
|
|
22
|
|
|
(95
|
)
|
|
91
|
|
||||
Interest rate swaps designated as fair value hedges
|
Interest expense, net
|
|
78
|
|
|
(63
|
)
|
|
443
|
|
|
(306
|
)
|
||||
Debt designated as hedged item in fair value hedges
|
Interest expense, net
|
|
(78
|
)
|
|
63
|
|
|
(443
|
)
|
|
306
|
|
•
|
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
|
$
|
10,648
|
|
|
$
|
1,288
|
|
|
$
|
9,360
|
|
|
$
|
—
|
|
Debt securities
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Equity securities
|
62
|
|
|
62
|
|
|
—
|
|
|
—
|
|
||||
Interest rate hedges
|
44
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||
Foreign currency contracts
|
86
|
|
|
—
|
|
|
86
|
|
|
—
|
|
||||
Treasury rate lock agreements
|
123
|
|
|
—
|
|
|
123
|
|
|
—
|
|
||||
Total assets
|
$
|
10,965
|
|
|
$
|
1,350
|
|
|
$
|
9,615
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate hedges
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
—
|
|
Foreign currency contracts
|
37
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||
Treasury rate lock agreements
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
Contingent consideration
|
6,957
|
|
|
—
|
|
|
—
|
|
|
6,957
|
|
||||
Total liabilities
|
$
|
7,096
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
$
|
6,957
|
|
2019 Form 10-Q |
|
16
|
|
|
|
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
|
$
|
7,289
|
|
|
$
|
1,209
|
|
|
$
|
6,080
|
|
|
$
|
—
|
|
Time deposits
|
568
|
|
|
—
|
|
|
568
|
|
|
—
|
|
||||
Debt securities
|
1,536
|
|
|
—
|
|
|
1,536
|
|
|
—
|
|
||||
Equity securities
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency contracts
|
132
|
|
|
—
|
|
|
132
|
|
|
—
|
|
||||
Total assets
|
$
|
9,529
|
|
|
$
|
1,213
|
|
|
$
|
8,316
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate hedges
|
$
|
466
|
|
|
$
|
—
|
|
|
$
|
466
|
|
|
$
|
—
|
|
Foreign currency contracts
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||
Contingent consideration
|
4,483
|
|
|
—
|
|
|
—
|
|
|
4,483
|
|
||||
Total liabilities
|
$
|
4,975
|
|
|
$
|
—
|
|
|
$
|
492
|
|
|
$
|
4,483
|
|
|
|
Nine months ended
September 30, |
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Beginning balance
|
|
$
|
4,483
|
|
|
$
|
4,534
|
|
Change in fair value recognized in net earnings
|
|
2,653
|
|
|
432
|
|
||
Payments
|
|
(179
|
)
|
|
(100
|
)
|
||
Ending balance
|
|
$
|
6,957
|
|
|
$
|
4,866
|
|
2019 Form 10-Q |
|
17
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||||
(in millions)
|
Book value
|
Approximate fair value
|
|
Quoted prices
in active markets for
identical assets
(Level 1) |
|
Significant
other
observable
inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of long-term debt and finance lease obligations, excluding fair value hedges
|
$
|
5,284
|
|
$
|
5,293
|
|
|
$
|
5,286
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Long-term debt and finance lease obligations, excluding fair value hedges
|
33,141
|
|
34,964
|
|
|
34,943
|
|
|
21
|
|
|
—
|
|
|||||
Total liabilities
|
$
|
38,425
|
|
$
|
40,257
|
|
|
$
|
40,229
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
|
|
|
Basis of fair value measurement
|
||||||||||||||
(in millions)
|
Book value
|
Approximate fair value
|
|
Quoted prices
in active markets for
identical assets
(Level 1) |
|
Significant
other
observable
inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
3,699
|
|
$
|
3,693
|
|
|
$
|
—
|
|
|
$
|
3,693
|
|
|
$
|
—
|
|
Current portion of long-term debt and finance lease obligations, excluding fair value hedges
|
1,609
|
|
1,617
|
|
|
1,609
|
|
|
8
|
|
|
—
|
|
|||||
Long-term debt and finance lease obligations, excluding fair value hedges
|
35,468
|
|
34,052
|
|
|
34,024
|
|
|
28
|
|
|
—
|
|
|||||
Total liabilities
|
$
|
40,776
|
|
$
|
39,362
|
|
|
$
|
35,633
|
|
|
$
|
3,729
|
|
|
$
|
—
|
|
|
Amortized cost
|
|
Gross unrealized
|
|
Fair value
|
||||||||||
(in millions)
|
|
Gains
|
|
Losses
|
|
||||||||||
Asset backed securities
|
$
|
423
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
421
|
|
Corporate debt securities
|
1,042
|
|
|
1
|
|
|
(9
|
)
|
|
1,034
|
|
||||
Other debt securities
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
Total
|
$
|
1,546
|
|
|
$
|
1
|
|
|
$
|
(11
|
)
|
|
$
|
1,536
|
|
2019 Form 10-Q |
|
18
|
|
|
Defined
benefit plans |
|
Other post-
employment plans |
||||||||||||||||||||||||||||
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
Service cost
|
$
|
67
|
|
|
$
|
70
|
|
|
$
|
202
|
|
|
$
|
214
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
19
|
|
|
$
|
20
|
|
Interest cost
|
64
|
|
|
57
|
|
|
194
|
|
|
171
|
|
|
6
|
|
|
6
|
|
|
21
|
|
|
18
|
|
||||||||
Expected return on plan assets
|
(118
|
)
|
|
(109
|
)
|
|
(356
|
)
|
|
(330
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Amortization of actuarial losses and prior service cost
|
27
|
|
|
38
|
|
|
82
|
|
|
114
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
Net periodic benefit cost
|
$
|
40
|
|
|
$
|
56
|
|
|
$
|
122
|
|
|
$
|
169
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
41
|
|
|
$
|
39
|
|
2019 Form 10-Q |
|
19
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of products sold
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
24
|
|
|
$
|
23
|
|
Research and development
|
|
31
|
|
|
32
|
|
|
136
|
|
|
139
|
|
||||
Selling, general and administrative
|
|
40
|
|
|
36
|
|
|
191
|
|
|
189
|
|
||||
Pre-tax compensation expense
|
|
75
|
|
|
75
|
|
|
351
|
|
|
351
|
|
||||
Tax benefit
|
|
15
|
|
|
13
|
|
|
64
|
|
|
61
|
|
||||
After-tax compensation expense
|
|
$
|
60
|
|
|
$
|
62
|
|
|
$
|
287
|
|
|
$
|
290
|
|
2019
|
|
2018
|
||||||||||||
Date Declared
|
|
Payment Date
|
|
Dividend Per Share
|
|
Date Declared
|
|
Payment Date
|
|
Dividend Per Share
|
||||
11/01/19
|
|
02/14/20
|
|
$
|
1.18
|
|
|
11/02/18
|
|
02/15/19
|
|
$
|
1.07
|
|
09/06/19
|
|
11/15/19
|
|
$
|
1.07
|
|
|
09/07/18
|
|
11/15/18
|
|
$
|
0.96
|
|
06/20/19
|
|
08/15/19
|
|
$
|
1.07
|
|
|
06/14/18
|
|
08/15/18
|
|
$
|
0.96
|
|
02/21/19
|
|
05/15/19
|
|
$
|
1.07
|
|
|
02/15/18
|
|
05/15/18
|
|
$
|
0.96
|
|
2019 Form 10-Q |
|
20
|
(in millions)
|
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, 2018
|
$
|
(830
|
)
|
|
$
|
(65
|
)
|
|
$
|
(1,722
|
)
|
|
$
|
(10
|
)
|
|
$
|
147
|
|
|
$
|
(2,480
|
)
|
Other comprehensive income (loss) before reclassifications
|
(288
|
)
|
|
199
|
|
|
12
|
|
|
12
|
|
|
77
|
|
|
12
|
|
||||||
Net losses (gains) reclassified from accumulated other comprehensive loss
|
—
|
|
|
(15
|
)
|
|
66
|
|
|
(2
|
)
|
|
(109
|
)
|
|
(60
|
)
|
||||||
Net current-period other comprehensive income (loss)
|
(288
|
)
|
|
184
|
|
|
78
|
|
|
10
|
|
|
(32
|
)
|
|
(48
|
)
|
||||||
Balance as of September 30, 2019
|
$
|
(1,118
|
)
|
|
$
|
119
|
|
|
$
|
(1,644
|
)
|
|
$
|
—
|
|
|
$
|
115
|
|
|
$
|
(2,528
|
)
|
(in millions)
|
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, 2017
|
$
|
(439
|
)
|
|
$
|
(203
|
)
|
|
$
|
(1,919
|
)
|
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
(2,727
|
)
|
Other comprehensive income (loss) before reclassifications
|
(250
|
)
|
|
73
|
|
|
7
|
|
|
(6
|
)
|
|
110
|
|
|
(66
|
)
|
||||||
Net losses reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
92
|
|
|
4
|
|
|
138
|
|
|
234
|
|
||||||
Net current-period other comprehensive income (loss)
|
(250
|
)
|
|
73
|
|
|
99
|
|
|
(2
|
)
|
|
248
|
|
|
168
|
|
||||||
Balance as of September 30, 2018
|
$
|
(689
|
)
|
|
$
|
(130
|
)
|
|
$
|
(1,820
|
)
|
|
$
|
(2
|
)
|
|
$
|
82
|
|
|
$
|
(2,559
|
)
|
2019 Form 10-Q |
|
21
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions) (brackets denote gains)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Pension and post-employment benefits
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial losses and other(a)
|
$
|
28
|
|
|
$
|
38
|
|
|
$
|
83
|
|
|
$
|
115
|
|
Tax benefit
|
(5
|
)
|
|
(8
|
)
|
|
(17
|
)
|
|
(23
|
)
|
||||
Total reclassifications, net of tax
|
$
|
23
|
|
|
$
|
30
|
|
|
$
|
66
|
|
|
$
|
92
|
|
Cash flow hedging activities
|
|
|
|
|
|
|
|
||||||||
Losses (gains) on foreign currency forward exchange contracts(b)
|
$
|
(42
|
)
|
|
$
|
54
|
|
|
$
|
(119
|
)
|
|
$
|
144
|
|
Tax expense (benefit)
|
3
|
|
|
—
|
|
|
10
|
|
|
(6
|
)
|
||||
Total reclassifications, net of tax
|
$
|
(39
|
)
|
|
$
|
54
|
|
|
$
|
(109
|
)
|
|
$
|
138
|
|
Net investment hedging activities
|
|
|
|
|
|
|
|
||||||||
Gains on derivative amount excluded from effectiveness testing(c)
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
Tax expense
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total reclassifications, net of tax
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
|
2019 Form 10-Q |
|
22
|
2019 Form 10-Q |
|
23
|
2019 Form 10-Q |
|
24
|
2019 Form 10-Q |
|
25
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
|
|
|
||||||||||||||
(in millions)
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Immunology
|
|
|
|
|
|
|
|
|
|||||||||
HUMIRA
|
United States
|
|
$
|
3,887
|
|
|
$
|
3,546
|
|
|
$
|
10,895
|
|
|
$
|
10,070
|
|
|
International
|
|
1,049
|
|
|
1,578
|
|
|
3,357
|
|
|
4,948
|
|
||||
|
Total
|
|
$
|
4,936
|
|
|
$
|
5,124
|
|
|
$
|
14,252
|
|
|
$
|
15,018
|
|
SKYRIZI
|
United States
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
118
|
|
|
$
|
—
|
|
|
International
|
|
15
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
|
Total
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
$
|
—
|
|
RINVOQ
|
United States
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Hematologic Oncology
|
|
|
|
|
|
|
|
|
|||||||||
IMBRUVICA
|
United States
|
|
$
|
1,042
|
|
|
$
|
812
|
|
|
$
|
2,757
|
|
|
$
|
2,129
|
|
|
Collaboration revenues
|
|
215
|
|
|
160
|
|
|
621
|
|
|
455
|
|
||||
|
Total
|
|
$
|
1,257
|
|
|
$
|
972
|
|
|
$
|
3,378
|
|
|
$
|
2,584
|
|
VENCLEXTA
|
United States
|
|
$
|
142
|
|
|
$
|
69
|
|
|
$
|
364
|
|
|
$
|
157
|
|
|
International
|
|
79
|
|
|
27
|
|
|
177
|
|
|
63
|
|
||||
|
Total
|
|
$
|
221
|
|
|
$
|
96
|
|
|
$
|
541
|
|
|
$
|
220
|
|
HCV
|
|
|
|
|
|
|
|
|
|||||||||
MAVYRET
|
United States
|
|
$
|
368
|
|
|
$
|
444
|
|
|
$
|
1,167
|
|
|
$
|
1,206
|
|
|
International
|
|
327
|
|
|
395
|
|
|
1,098
|
|
|
1,413
|
|
||||
|
Total
|
|
$
|
695
|
|
|
$
|
839
|
|
|
$
|
2,265
|
|
|
$
|
2,619
|
|
VIEKIRA
|
United States
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
International
|
|
3
|
|
|
23
|
|
|
32
|
|
|
132
|
|
||||
|
Total
|
|
$
|
3
|
|
|
$
|
23
|
|
|
$
|
32
|
|
|
$
|
135
|
|
Other Key Products
|
|
|
|
|
|
|
|
|
|||||||||
Creon
|
United States
|
|
$
|
265
|
|
|
$
|
239
|
|
|
$
|
749
|
|
|
$
|
667
|
|
Lupron
|
United States
|
|
$
|
187
|
|
|
$
|
173
|
|
|
$
|
546
|
|
|
$
|
530
|
|
|
International
|
|
43
|
|
|
41
|
|
|
122
|
|
|
126
|
|
||||
|
Total
|
|
$
|
230
|
|
|
$
|
214
|
|
|
$
|
668
|
|
|
$
|
656
|
|
Synthroid
|
United States
|
|
$
|
197
|
|
|
$
|
192
|
|
|
$
|
582
|
|
|
$
|
567
|
|
Synagis
|
International
|
|
$
|
132
|
|
|
$
|
97
|
|
|
$
|
457
|
|
|
$
|
462
|
|
Duodopa
|
United States
|
|
$
|
26
|
|
|
$
|
19
|
|
|
$
|
72
|
|
|
$
|
57
|
|
|
International
|
|
91
|
|
|
87
|
|
|
271
|
|
|
260
|
|
||||
|
Total
|
|
$
|
117
|
|
|
$
|
106
|
|
|
$
|
343
|
|
|
$
|
317
|
|
Sevoflurane
|
United States
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
53
|
|
|
$
|
54
|
|
|
International
|
|
66
|
|
|
68
|
|
|
214
|
|
|
251
|
|
||||
|
Total
|
|
$
|
84
|
|
|
$
|
86
|
|
|
$
|
267
|
|
|
$
|
305
|
|
Kaletra
|
United States
|
|
$
|
7
|
|
|
$
|
16
|
|
|
$
|
30
|
|
|
$
|
42
|
|
|
International
|
|
67
|
|
|
72
|
|
|
199
|
|
|
210
|
|
||||
|
Total
|
|
$
|
74
|
|
|
$
|
88
|
|
|
$
|
229
|
|
|
$
|
252
|
|
AndroGel
|
United States
|
|
$
|
53
|
|
|
$
|
135
|
|
|
$
|
149
|
|
|
$
|
393
|
|
ORILISSA
|
United States
|
|
$
|
27
|
|
|
$
|
3
|
|
|
$
|
58
|
|
|
$
|
3
|
|
|
International
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
|
Total
|
|
$
|
27
|
|
|
$
|
3
|
|
|
$
|
59
|
|
|
$
|
3
|
|
All other
|
|
|
$
|
83
|
|
|
$
|
22
|
|
|
$
|
438
|
|
|
$
|
250
|
|
Total net revenues
|
|
$
|
8,479
|
|
|
$
|
8,236
|
|
|
$
|
24,562
|
|
|
$
|
24,448
|
|
2019 Form 10-Q |
|
26
|
|
2019 Form 10-Q |
|
27
|
•
|
In February 2019, the U.S. Food and Drug Administration (FDA) accepted for priority review AbbVie's New Drug Application (NDA) for upadacitinib, an investigational oral JAK1-selective inhibitor, for the treatment of adult patients with moderate to severe rheumatoid arthritis (RA).
|
•
|
In February 2019, AbbVie initiated a Phase 3 clinical trial to evaluate the efficacy and safety of upadacitinib in subjects with giant cell arteritis.
|
•
|
In August 2019, the FDA approved RINVOQ (upadacitinib) for the treatment of adults with moderately to severely active RA who have had an inadequate response or intolerance to methotrexate.
|
•
|
In October 2019, AbbVie announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion for RINVOQ for the treatment of adults with moderate to severe active RA.
|
•
|
In October 2019, AbbVie announced top-line results from its first Phase 3 clinical trial of RINVOQ in adult patients with active psoriatic arthritis. Results from the SELECT-PsA 2 study, which evaluated RINVOQ versus placebo in patients who did not adequately respond to treatment with one or more biologic DMARDs, showed that both doses of RINVOQ (15 mg and 30 mg) met the primary endpoint of ACR20 response at week 12. Key secondary endpoints were also achieved and included HAQ-DI, PASI75, minimal disease activity, ACR50 and ACR70. The safety profile was consistent with that of previous studies across indications, with no new safety signals detected.
|
•
|
In March 2019, AbbVie initiated two Phase 3 clinical trials to evaluate the efficacy and safety of risankizumab, an investigational interleukin-23 (IL-23) inhibitor, in subjects with psoriatic arthritis.
|
•
|
In April 2019, the FDA approved SKYRIZI (risankizumab) for the treatment of moderate to severe plaque psoriasis in adults who are candidates for systemic therapy or phototherapy.
|
•
|
In April 2019, the European Commission granted marketing authorization for SKYRIZI for the treatment of moderate to severe plaque psoriasis in adult patients who are candidates for systemic therapy.
|
2019 Form 10-Q |
|
28
|
•
|
In January 2019, the FDA approved IMBRUVICA, in combination with GAZYVA (obinutuzumab), for adult patients with previously untreated chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL).
|
•
|
In June 2019, AbbVie announced results from the Phase 3 CLL12 trial, evaluating IMBRUVICA in patients with previously untreated CLL, which demonstrated that IMBRUVICA significantly improved event- and progression-free survival.
|
•
|
In March 2019, AbbVie announced that the FDA placed a partial clinical hold on all clinical trials evaluating VENCLEXTA for the investigational treatment of multiple myeloma (MM). The partial clinical hold followed a review of data from the ongoing Phase 3 BELLINI trial, a study in relapsed/refractory MM, in which a higher proportion of deaths was observed in the VENCLEXTA arm compared to the control arm of the trial. In June 2019, AbbVie announced that the FDA lifted the partial clinical hold placed on the Phase 3 CANOVA trial, evaluating VENCLEXTA for the investigational treatment of relapsed/refractory MM positive for the translocation (11;14) abnormality, based upon agreement on revisions to the CANOVA study protocol, including new risk mitigation measures, protocol-specified guidelines and updated futility criteria. This action does not impact any of the approved indications for VENCLEXTA, such as CLL or acute myeloid leukemia (AML).
|
•
|
In May 2019, the FDA approved VENCLEXTA, in combination with obinutuzumab, for adult patients with previously untreated CLL/SLL. The approval was based on data from the Phase 3 CLL14 trial, evaluating the efficacy and safety of VENCLEXTA plus obinutuzumab versus obinutuzumab plus chlorambucil in previously untreated patients with CLL, which demonstrated that VENCLEXTA plus obinutuzumab prolonged progression-free survival and achieved higher rates of complete response and minimal residual disease-negativity compared to commonly used standard of care obinutuzumab plus chlorambucil.
|
•
|
In May 2019, AbbVie announced the decision to discontinue the Phase 3 INTELLANCE-1 study of depatuxizumab mafodotin (Depatux-M, previously known as ABT-414) in patients with newly diagnosed glioblastoma, whose tumors have EGFR (epidermal growth factor receptor) amplification, at an interim analysis. An Independent Data Monitoring Committee recommended stopping enrollment in INTELLANCE-1 due to lack of survival benefit for patients receiving Depatux-M compared with placebo when added to the standard regimen of radiation and temozolomide. Enrollment has been halted in all ongoing Depatux-M studies.
|
•
|
In July 2019, AbbVie announced that top-line results from the Phase 3 BROCADE3 study evaluating veliparib, an investigational, oral poly (adenosine diphosphate-ribose) polymerase (PARP) inhibitor, in combination with carboplatin and paclitaxel met its primary endpoint of progression-free survival in patients with HER2 negative germline BRCA-mutated advanced breast cancer.
|
•
|
In July 2019, AbbVie announced that top-line results from the Phase 3 VELIA study, conducted in collaboration with the GOG Foundation, Inc., evaluating veliparib with carboplatin and paclitaxel followed by veliparib maintenance therapy met its primary endpoint of progression-free survival in patients with newly diagnosed ovarian cancer, regardless of biomarker status.
|
•
|
In August 2019, AbbVie announced the decision to terminate the MERU trial, a Phase 3 study evaluating rovalpituzumab tesirine (Rova-T) as a first-line maintenance therapy for advanced small-cell lung cancer (SCLC). An Independent Data Monitoring Committee recommended terminating the study after results demonstrated no survival benefit at a pre-planned interim analysis for patients receiving Rova-T as compared with placebo. With the closing of the MERU trial, AbbVie announced the termination of the Rova-T research and development program.
|
2019 Form 10-Q |
|
29
|
•
|
In August 2019, the European Commission granted marketing authorization for MAVIRET (glecaprevir/pibrentasvir) to shorten the once-daily treatment duration from 12 to 8 weeks in treatment-naïve, compensated cirrhotic, chronic hepatitis C (HCV) patients with genotype (GT)1, 2, 4, 5 and 6 infection. An analysis from the same clinical trial evaluating MAVIRET as an 8-week, once-daily treatment option for treatment-naïve, compensated cirrhotic, GT3 HCV patients is ongoing.
|
•
|
In September 2019, the FDA approved MAVYRET (glecaprevir/pibrentasvir) to shorten the once-daily treatment duration from 12 to 8 weeks in treatment-naïve, compensated cirrhotic, chronic HCV patients across all genotypes (GT1-6).
|
•
|
In May 2019, AbbVie initiated a Phase 3 clinical trial to evaluate the safety and tolerability of ABBV-951, a subcutaneous levodopa/carbidopa delivery system, in subjects with Parkinson's disease.
|
•
|
In July 2019, AbbVie announced the decision to discontinue the Phase 2 ARISE study evaluating ABBV-8E12, an investigational anti-tau antibody, in patients with progressive supranuclear palsy, after an Independent Data Monitoring Committee recommended stopping the trial for futility after the trial showed that ABBV-8E12 did not provide efficacy.
|
•
|
In July 2019, AbbVie submitted an NDA to the FDA for elagolix in combination with estradiol/norethindrone acetate (E2/NETA) daily add-back therapy for the management of heavy menstrual bleeding associated with uterine fibroids.
|
2019 Form 10-Q |
|
30
|
|
|
Three months ended
September 30, |
|
Percent change
|
|
Nine months ended
September 30, |
|
Percent change
|
||||||||||||||||||||
|
|
|
At actual
currency rates |
|
At constant
currency rates |
|
|
At actual
currency rates |
|
At constant
currency rates |
||||||||||||||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||||||||
United States
|
|
$
|
6,244
|
|
|
$
|
5,597
|
|
|
11.6
|
%
|
|
11.6
|
%
|
|
$
|
17,478
|
|
|
$
|
15,836
|
|
|
10.4
|
%
|
|
10.4
|
%
|
International
|
|
2,235
|
|
|
2,639
|
|
|
(15.3
|
)%
|
|
(13.7
|
)%
|
|
7,084
|
|
|
8,612
|
|
|
(17.7
|
)%
|
|
(14.1
|
)%
|
||||
Net revenues
|
|
$
|
8,479
|
|
|
$
|
8,236
|
|
|
3.0
|
%
|
|
3.5
|
%
|
|
$
|
24,562
|
|
|
$
|
24,448
|
|
|
0.5
|
%
|
|
1.8
|
%
|
2019 Form 10-Q |
|
31
|
2019 Form 10-Q |
|
32
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
% change
|
|
2019
|
|
2018
|
|
% change
|
||||||||||
Gross margin
|
|
$
|
6,559
|
|
|
$
|
6,401
|
|
|
2
|
%
|
|
$
|
19,129
|
|
|
$
|
18,752
|
|
|
2
|
%
|
as a % of net revenues
|
|
77
|
%
|
|
78
|
%
|
|
|
|
78
|
%
|
|
77
|
%
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
% change
|
|
2019
|
|
2018
|
|
% change
|
||||||||||
Selling, general and administrative
|
|
$
|
1,657
|
|
|
$
|
1,919
|
|
|
(14
|
)%
|
|
$
|
4,991
|
|
|
$
|
5,470
|
|
|
(9
|
)%
|
as a % of net revenues
|
|
20
|
%
|
|
23
|
%
|
|
|
|
20
|
%
|
|
22
|
%
|
|
|
2019 Form 10-Q |
|
33
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense
|
|
$
|
480
|
|
|
$
|
339
|
|
|
$
|
1,225
|
|
|
$
|
968
|
|
Interest income
|
|
(60
|
)
|
|
(37
|
)
|
|
(171
|
)
|
|
(143
|
)
|
||||
Interest expense, net
|
|
$
|
420
|
|
|
$
|
302
|
|
|
$
|
1,054
|
|
|
$
|
825
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net foreign exchange loss
|
|
$
|
19
|
|
|
$
|
2
|
|
|
$
|
31
|
|
|
$
|
18
|
|
Other expense, net
|
|
177
|
|
|
94
|
|
|
2,590
|
|
|
411
|
|
2019 Form 10-Q |
|
34
|
|
Nine months ended
September 30, |
||||||
(in millions)
|
2019
|
|
2018
|
||||
Cash flows provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
10,049
|
|
|
$
|
10,035
|
|
Investing activities
|
1,211
|
|
|
(723
|
)
|
||
Financing activities
|
(7,894
|
)
|
|
(10,571
|
)
|
2019 Form 10-Q |
|
35
|
2019 Form 10-Q |
|
36
|
|
2019 Form 10-Q |
|
37
|
|
2019 Form 10-Q |
|
38
|
|
|
|
Period
|
(a) Total
Number of Shares
(or Units)
Purchased |
|
(b) Average
Price Paid per Share (or Unit) |
|
(c) Total Number
of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
(d) Maximum
Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
|
||
July 1, 2019 – July 31, 2019
|
1,281
|
|
(1)
|
$71.19
|
(1)
|
—
|
|
|
$3,950,021,071
|
|
August 1, 2019 – August 31, 2019
|
1,290
|
|
(1)
|
$65.06
|
(1)
|
—
|
|
|
$3,950,021,071
|
|
September 1, 2019 – September 30, 2019
|
1,245
|
|
(1)
|
$67.27
|
(1)
|
—
|
|
|
$3,950,021,071
|
|
Total
|
3,816
|
|
(1)
|
$67.84
|
(1)
|
—
|
|
|
$3,950,021,071
|
|
1.
|
In addition to AbbVie shares repurchased on the open market under a publicly announced program, if any, these shares also included the shares purchased on the open market for the benefit of participants in the AbbVie Employee Stock Purchase Plan – 1,281 in July; 1,290 in August; and 1,245 in September.
|
2019 Form 10-Q |
|
39
|
|
Exhibit No.
|
|
Exhibit Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
The following financial statements and notes from the AbbVie Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed on November 6, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Earnings; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to Condensed Consolidated Financial Statements.
|
2019 Form 10-Q |
|
40
|
|
|
ABBVIE INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Robert A. Michael
|
|
|
Robert A. Michael
|
|
|
Executive Vice President,
|
|
|
Chief Financial Officer
|
2019 Form 10-Q |
|
41
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
November 6, 2019
|
/s/ Richard A. Gonzalez
|
|
|
Richard A. Gonzalez, Chairman of the Board
|
|
|
and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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
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5.
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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:
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a)
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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
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b)
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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.
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Date:
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November 6, 2019
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/s/ Robert A. Michael
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|
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Robert A. Michael, Executive Vice President,
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|
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Richard A. Gonzalez
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Richard A. Gonzalez
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Chairman of the Board and Chief Executive Officer
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November 6, 2019
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(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Robert A. Michael
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Robert A. Michael
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Executive Vice President, Chief Financial Officer
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November 6, 2019
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