AbbVie ABBV · USD

Segment and Geographic Area InformationAbbVie operates as a single global business segment dedicated to the research and development, manufacturing, commercialization and sale of innovative medicines and therapies. This operating structure enables the Chief Executive Officer, as Chief Operating Decision Maker (CODM), to allocate resources and assess business performance on a global basis in order to achieve established long-term strategic goals. Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, manufacturing and supply of products. Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region or therapeutic area. All of these activities are supported by a global corporate administrative staff. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the CODM for purposes of assessing performance, allocating resources and planning and forecasting future periods.The CODM regularly reviews net revenues, net earnings and significant segment expenses and uses net earnings as its principal measure of segment profit or loss. Net earnings and significant segment expenses reviewed by CODM are reported on the consolidated statement of earnings for the years ended December 31, 2025, 2024 and 2023. The CODM uses net earnings as its principal measure of segment profit or loss to compare past financial performance with current performance and analyze underlying business performance and trends. The CODM does not use segment assets to make decisions regarding resources; therefore, the total asset disclosure has not been included.Substantially all of AbbVie's pharmaceutical product net revenues in the United States are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served.

Debt, Credit Facilities and Commitments and Contingencies The following table summarizes long-term debt:as of December 31 (dollars in millions)2025 Effective interest rate (a)20252024 Effective interest rate (a)20243.60-3.80% aggregate notes due 20252.09-3.66% $— 2.09-3.66% $6,771 2.95% senior notes due 20263.02 %4,000 3.02 %4,000 3.20% senior notes due 20263.28 %2,000 3.28 %2,000 4.549% term loan due 20274.61 %2,000 4.61 %2,000 0.75% senior euro notes due 2027 (€750 principal)0.86 %880 0.86 %778 4.80% senior notes due 20274.93 %2,250 4.93 %2,250 4.25% senior notes due 20284.38 %1,750 4.38 %1,750 4.65% senior notes due 20284.78 %1,250 — — 2.125% senior euro notes due 2028 (€750 principal)2.18 %880 2.18 %778 2.625% senior euro notes due 2028 (€500 principal)1.20 %586 1.20 %519 3.20% senior notes due 20293.25 %5,500 3.25 %5,500 2.125% senior euro notes due 2029 (€550 principal)1.19 %645 1.19 %570 4.80% senior notes due 20294.91 %2,500 4.91 %2,500 4.875% senior notes due 20304.96 %1,000 — — 1.25% senior euro notes due 2031 (€650 principal)1.30 %761 1.30 %674 4.95% senior notes due 20315.02 %2,000 5.02 %2,000 5.05% senior notes due 20345.13 %3,000 5.13 %3,000 4.55% senior notes due 20353.52 %1,789 3.52 %1,789 4.50% senior notes due 20354.58 %2,500 4.58 %2,500 5.20% senior notes due 20355.26 %1,000 — — 4.30% senior notes due 20364.37 %1,000 4.37 %1,000 4.05% senior notes due 20394.11 %4,000 4.11 %4,000 4.40% senior notes due 20424.46 %2,600 4.46 %2,600 4.625% senior notes due 20424.00 %457 4.00 %457 4.85% senior notes due 20444.11 %1,074 4.11 %1,074 5.35% senior notes due 20445.39 %750 5.39 %750 4.70% senior notes due 20454.73 %2,700 4.73 %2,700 4.75% senior notes due 20454.20 %881 4.20 %881 4.45% senior notes due 20464.50 %2,000 4.50 %2,000 4.875% senior notes due 20484.94 %1,750 4.94 %1,750 4.25% senior notes due 20494.29 %5,750 4.29 %5,750 5.40% senior notes due 20545.44 %3,000 5.44 %3,000 5.60% senior notes due 20555.64 %750 — — 5.50% senior notes due 20645.53 %1,500 5.53 %1,500 Fair value hedges(47)(224)Unamortized bond discounts(122)(130)Unamortized deferred financing costs(259)(266)Unamortized bond premiums503 555 Financing liability378 328 Other41 40 Total long-term debt and finance lease obligations64,997 67,144 Current portion6,056 6,804 Noncurrent portion$58,941 $60,340 (a)Excludes the effect of any related interest rate swaps.

Income Taxes Earnings Before Income Tax Expenseyears ended December 31 (in millions)202520242023Domestic$(3,540)$(7,743)$(3,475)Foreign10,137 11,459 9,725 Total earnings before income tax expense$6,597 $3,716 $6,250 Income Tax Expenseyears ended December 31 (in millions)202520242023CurrentDomestic$1,230 $(331)$3,272 Foreign1,626 1,210 994 Total current taxes$2,856 $879 $4,266 DeferredDomestic$(61)$(1,303)$(2,324)Foreign(431)(146)(565)Total deferred taxes$(492)$(1,449)$(2,889)Total income tax expense (benefit)$2,364 $(570)$1,377 Effective Tax Rate Reconciliation ASU 2023-09 was adopted on a prospective basis for the year ended December 31, 2025, accordingly the following table has been included which reconciles the U.S. federal statutory tax rate and expense to the effective tax rate:year ended December 31 (dollars in millions, except for percentages)2025Statutory tax rate$1,385 21.0 %Foreign tax effectsPuerto RicoTax rate differential1,426 21.6 Impact from industrial development income(2,989)(45.3)Other (23)(0.3)BermudaTax rate differential104 1.6 Valuation allowances286 4.3 Other(14)(0.2)Ireland Tax rate differential(115)(1.7)Net operating loss utilization101 1.5 Other(7)(0.1)MaltaTax rate differential(118)(1.8)Deduction on equity(128)(1.9)Non-deductible items241 3.7 Other35 0.5 All other, net94 1.4 Effect of cross-border tax lawsGlobal intangible low-taxed income, net of foreign tax credit (FTC)1,114 16.9 U.S. tax impact of branch accounting, net of FTC(149)(2.3)Other99 1.5 Tax credits(142)(2.2)Unrecognized tax benefits654 9.9 Change in valuation allowances(94)(1.4)Non-taxable and non-deductible acquisition costs649 9.8 All other, net(45)(0.7)Effective tax rate$2,364 35.8 %As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:years ended December 31 20242023Statutory tax rate21.0 %21.0 %Effect of foreign operations7.6 8.0 U.S. tax credits(5.4)(3.1)Stock-based compensation (1.2)(1.0)Non-deductible expenses1.1 0.7 Tax law changes and related structuring(0.3)(3.8)Tax audits, settlements and reserves(51.4)(1.1)Acquisition costs13.4 0.2 All other, net(0.1)1.1 Effective tax rate(15.3)%22.

Leases AbbVie's lease portfolio primarily consists of real estate properties, vehicles and equipment. The following table summarizes the amounts and location of operating and finance leases on the consolidated balance sheets:as of December 31 (in millions)Balance sheet caption20252024AssetsOperatingOther assets$737 $723 FinanceProperty and equipment, net44 33 Total lease assets$781 $756 LiabilitiesOperatingCurrentAccounts payable and accrued liabilities$194 $178 NoncurrentOther long-term liabilities689 697 FinanceCurrentCurrent portion of long-term debt and finance lease obligations19 17 NoncurrentLong-term debt and finance lease obligations22 23 Total lease liabilities$924 $915 The following table summarizes the lease costs recognized in the consolidated statements of earnings:years ended December 31 (in millions)202520242023Operating lease cost$213 $196 $189 Short-term lease cost75 65 28 Variable lease cost104 86 88 Total lease cost$392 $347 $305 Sublease income and finance lease costs were insignificant in 2025, 2024 and 2023.The following table presents the weighted-average remaining lease term and weighted-average discount rate for operating and finance leases:years ended December 31202520242023Weighted-average remaining lease term (years)Operating677Finance453Weighted-average discount rateOperating3.5 %3.3 %3.0 %Finance4.3 %4.2 %3.6 %The following table presents supplementary cash flow information regarding the company's leases:years ended December 31 (in millions)202520242023Cash paid for amounts included in the measurement of lease liabilitiesOperating cash flows from operating leases$230 $204 $214 Right-of-use assets obtained in exchange for new operating lease liabilities212 159 173 Finance lease cash flows were insignificant in 2025, 2024 and 2023. The following table summarizes the future maturities of AbbVie's operating and finance lease liabilities as of December 31, 2025:(in millions)OperatingleasesFinanceleasesTotal(a)2026$224 $21 $245 2027187 11 198 2028157 7 164 2029133 3 136 2030100 — 100 Thereafter184 2 186 Total lease payments985 44 1,029 Less: Interest102 3 105 Present value of lease liabilities$883 $41 $924 (a)Lease payments recognized as part of lease liabilities for optional renewal periods are insignificant.

Licensing, Acquisitions and Other ArrangementsAcquisition of Nimble Therapeutics, Inc.On January 23, 2025, AbbVie completed its acquisition of Nimble Therapeutics, Inc. (Nimble). Nimble is a biotechnology company dedicated to delivering on the promise of oral peptide therapeutics and its lead asset, an investigational oral peptide IL23R inhibitor in development for the treatment of psoriasis. The aggregate purchase price of $288 million was comprised of a $210 million upfront cash payment and $78 million for the acquisition date fair value of contingent consideration liabilities, for which AbbVie may owe up to $130 million in future payments upon achievement of certain development milestones. The transaction was accounted for as a business combination using the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. As of the acquisition date, AbbVie acquired $118 million of intangible assets and the acquisition resulted in the recognition of $170 million of goodwill. Goodwill was calculated as the excess of the consideration transferred over the fair value of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized, including expected synergies related to enhancement of AbbVie’s existing immunology discovery capabilities and development efforts. The goodwill is not deductible for tax purposes. Other assets acquired and liabilities assumed were insignificant. Acquisition of Cerevel Therapeutics Holdings, Inc.On August 1, 2024, AbbVie completed its acquisition of Cerevel Therapeutics Holdings, Inc. (Cerevel Therapeutics). Cerevel Therapeutics is a clinical-stage biotechnology company focused on the discovery and development of differentiated therapies for neuroscience diseases. Cerevel Therapeutics neuroscience pipeline included multiple clinical-stage and preclinical candidates with the potential to treat several diseases including schizophrenia, Parkinson's disease and mood disorders. Under the terms of the agreement, AbbVie acquired all outstanding shares of Cerevel Therapeutics for $45.00 per share in cash. The total fair value of the consideration transferred to owners of Cerevel Therapeutics common stock was $8.7 billion ($8.3 billion, net of cash acquired).

CYBERSECURITYWe rely on complex information technology systems and various software applications to operate our business. We have developed a comprehensive cybersecurity program designed to protect our systems and the confidentiality, integrity and availability of our data. We have implemented processes that are intended to govern, manage and reduce cybersecurity risks. We maintain a global incident response plan and disaster recovery management plan, each designed to protect against, identify, detect, respond to and recover from an incident. These plans anticipate an array of potential scenarios and provide for the assembly of a cybersecurity incident response team in the event of a cyber incident. The incident response team is a cross-functional group that may be composed of both company personnel and external service providers, and which is tailored to a particular incident so that individuals with appropriate experience and expertise are available. We regularly conduct exercises to help ensure the plans’ effectiveness and our overall preparedness.We also have invested in tools and technologies to protect our and our patients' and customers' data and information technology, and we regularly monitor our information technology systems and infrastructure to identify and assess cybersecurity risks. We have designed a Threat Intelligence function that actively looks for emerging threats and risks that target the pharmaceutical industry generally or AbbVie specifically. We rely in part on third parties (including assessors, consultants, advisors and others) in connection with our processes for assessing, identifying, managing and reducing cyber risks.In addition, we have implemented a cybersecurity awareness program designed to educate and train our entire workforce on how to identify and report cybersecurity threats. Training programs are conducted on a periodic basis and are focused on giving employees information to manage and defend against the most relevant and prevalent cybersecurity risks to AbbVie. We also provide specialized training for employees in specialized information technology roles and for business functions who may be impacted by a cyber incident. We conduct regular drills, such as tabletop exercises, to help with our overall preparedness. We take measures to regularly update and improve our cybersecurity program, including conducting independent program assessments, penetration testing and scanning of our systems for vulnerabilities.

Equity Stock-Based CompensationIn 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (Amended Plan), which amends and restates the AbbVie 2013 Incentive Stock Program (2013 ISP). AbbVie grants stock-based awards to eligible employees pursuant to the Amended Plan, which provides for several different forms of benefits, including non-qualified stock options, RSUs and various performance-based awards. Under the Amended Plan, a total of 144 million shares of AbbVie common stock have been reserved for issuance as awards to AbbVie employees. AbbVie measures compensation expense for stock-based awards based on the grant date fair value of the awards and the estimated number of awards that are expected to vest. Forfeitures are estimated based on historical experience at the time of grant and are revised in subsequent periods if actual forfeitures differ from those estimates. Compensation cost for stock-based awards is amortized over the service period, which could be shorter than the vesting period if an employee is retirement eligible. Retirement eligible employees generally are those who are age 55 or older and have at least 10 years of service.Stock-based compensation expense is principally related to awards issued pursuant to the 2013 ISP and the Amended Plan and is summarized as follows:years ended December 31 (in millions)202520242023Cost of products sold$52 $55 $46 Research and development386 341 278 Selling, general and administrative517 515 423 Pre-tax compensation expense955 911 747 Tax benefit(170)(159)(136)After-tax compensation expense$785 $752 $611 Realized excess tax benefits associated with stock-based compensation totaled $58 million in 2025, $84 million in 2024 and $90 million in 2023. In addition to stock-based compensation expense included in the table above, in connection with the 2025 acquisition of Capstan and the 2024 acquisitions of ImmunoGen and Cerevel Therapeutics, AbbVie incurred cash-settled, post-closing expense for employee incentive awards, which is summarized in the table below:years ended December 31 (in millions)20252024Cost of products sold$— $36 Research and development28184Selling, general and administrative67290Total post-closing cash settled expense$95 $510 Stock OptionsStock options awarded to employees typically have a contractual term of 10 years and generally vest in one-third increments over a 3-year period.

Background BackgroundThe principal business of AbbVie Inc. (AbbVie or the company) is the discovery, development, manufacturing and sale of a broad line of therapies that address some of the world's most complex and serious diseases. AbbVie's products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. Certain products (including aesthetic products and devices) are also sold directly to physicians and other licensed healthcare providers. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market, works through largely centralized national payers systems to agree on reimbursement terms. AbbVie was incorporated in Delaware on April 10, 2012. On January 1, 2013, AbbVie became an independent, publicly-traded company as a result of the distribution by Abbott Laboratories (Abbott) of 100% of the outstanding common stock of AbbVie to Abbott's shareholders.