AbbVie Inc 10-Q for FY2024 Q1

AbbVie Inc. (ABBV)

10-Q 2024-05-03 For: 2024-03-31

Added on April 02, 2026

About this 10-Q

AbbVie Inc filed this 10-Q on May 3, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $12.31B; up 0.7% from $12.23B a year earlier
Net income: $1.37B; up 472.8% from net income of $239M a year earlier
Diluted EPS: $0.77; up 492.3% from $0.13 a year earlier

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(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	☐


PART I.	FINANCIAL INFORMATION
		Page

Item 1.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	1
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	28
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	37
Item 4.	CONTROLS AND PROCEDURES	38

PART II.	OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	39

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	39
I tem 5.	OTHER ITEMS	40
Item 6.	EXHIBITS	41


	Three months ended March 31,
(in millions, except per share data)		2024		2023
Net revenues		$	12,310	$	12,225

Cost of products sold		4,094		3,986
Selling, general and administrative		3,315		3,039
Research and development		1,939		2,292
Acquired IPR&D and milestones		164		150
Other operating income		—		(10)
Total operating costs and expenses		9,512		9,457
Operating earnings		2,798		2,768

Interest expense, net		453		454
Net foreign exchange loss		4		35
Other expense, net		586		1,804
Earnings before income tax expense		1,755		475
Income tax expense		383		234
Net earnings		1,372		241
Net earnings attributable to noncontrolling interest		3		2
Net earnings attributable to AbbVie Inc.		$	1,369	$	239

Per share data
Basic earnings per share attributable to AbbVie Inc.		$	0.77	$	0.13
Diluted earnings per share attributable to AbbVie Inc.		$	0.77	$	0.13

Weighted-average basic shares outstanding		1,769		1,770
Weighted-average diluted shares outstanding		1,773		1,776


	Three months ended March 31,
(in millions)		2024		2023
Net earnings		$	1,372	$	241

Foreign currency translation adjustments, net of tax expense (benefit) of $(20) for the three months ended March 31, 2024 and $12 for the three months ended March 31, 2023		(396)		194
Net investment hedging activities, net of tax expense (benefit) of $57 for the three months ended March 31, 2024 and $(60) for the three months ended March 31, 2023		207		(224)
Pension and post-employment benefits, net of tax expense (benefit) of $1 for the three months ended March 31, 2024 and $14 for the three months ended March 31, 2023		10		38
Cash flow hedging activities, net of tax expense (benefit) of $7 for the three months ended March 31, 2024 and $(4) for the three months ended March 31, 2023		30		(41)
Other comprehensive loss		(149)		(33)
Comprehensive income		1,223		208
Comprehensive income attributable to noncontrolling interest		3		2
Comprehensive income attributable to AbbVie Inc.		$	1,220	$	206


(in millions, except share data)	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Current assets
Cash and equivalents	$	18,067	$	12,814
Short-term investments	2		2
Accounts receivable, net	11,949		11,155
Inventories	4,245		4,099
Prepaid expenses and other	4,608		4,932
Total current assets	38,871		33,002

Investments	305		304
Property and equipment, net	4,980		4,989
Intangible assets, net	62,225		55,610
Goodwill	33,426		32,293
Other assets	9,067		8,513
Total assets	$	148,874	$	134,711

Liabilities and Equity
Current liabilities
Short-term borrowings	$	3	$	—
Current portion of long-term debt and finance lease obligations	10,193		7,191
Accounts payable and accrued liabilities	31,326		30,650
Total current liabilities	41,522		37,841

Long-term debt and finance lease obligations	63,805		52,194
Deferred income taxes	2,722		1,952
Other long-term liabilities	32,778		32,327

Commitments and contingencies

Stockholders' equity
Common stock, $0.01 par value, 4,000,000,000 shares authorized, 1,829,957,662 shares issued as of March 31, 2024 and 1,823,046,087 as of December 31, 2023	18		18
Common stock held in treasury, at cost, 64,234,512 shares as of March 31, 2024 and 57,105,354 as of December 31, 2023	(7,829)		(6,533)
Additional paid-in capital	20,656		20,180
Accumulated deficit	(2,384)		(1,000)
Accumulated other comprehensive loss	(2,454)		(2,305)
Total stockholders' equity	8,007		10,360
Noncontrolling interest	40		37
Total equity	8,047		10,397

Total liabilities and equity	$	148,874	$	134,711


(in millions)	Common shares outstanding	Common stock		Treasury stock		Additional paid-in capital		Retained earnings (accumulated deficit)		Accumulated other comprehensive loss		Noncontrolling interest		Total
Balance at December 31, 2022	1,769	$	18	$	(4,594)	$	19,245	$	4,784	$	(2,199)	$	33	$	17,287
Net earnings attributable to AbbVie Inc.	—	—		—		—		239		—		—		239
Other comprehensive loss, net of tax	—	—		—		—		—		(33)		—		(33)
Dividends declared	—	—		—		—		(2,630)		—		—		(2,630)
Purchases of treasury stock	(12)	—		(1,955)		—		—		—		—		(1,955)
Stock-based compensation plans and other	7	—		25		374		—		—		—		399
Change in noncontrolling interest	—	—		—		—		—		—		(4)		(4)
Balance at March 31, 2023	1,764	$	18	$	(6,524)	$	19,619	$	2,393	$	(2,232)	$	29	$	13,303

Balance at December 31, 2023	1,766	$	18	$	(6,533)	$	20,180	$	(1,000)	$	(2,305)	$	37	$	10,397
Net earnings attributable to AbbVie Inc.	—	—		—		—		1,369		—		—		1,369
Other comprehensive loss, net of tax	—	—		—		—		—		(149)		—		(149)
Dividends declared	—	—		—		—		(2,753)		—		—		(2,753)

Purchases of treasury stock	(7)	—		(1,324)		—		—		—		—		(1,324)
Stock-based compensation plans and other	7	—		28		476		—		—		—		504
Change in noncontrolling interest	—	—		—		—		—		—		3		3
Balance at March 31, 2024	1,766	$	18	$	(7,829)	$	20,656	$	(2,384)	$	(2,454)	$	40	$	8,047


	Three months ended March 31,
(in millions) (brackets denote cash outflows)	2024		2023
Cash flows from operating activities
Net earnings	$	1,372	$	241
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation	183		179
Amortization of intangible assets	1,891		1,948
Deferred income taxes	(389)		(267)
Change in fair value of contingent consideration liabilities	660		1,872
Payments of contingent consideration liabilities	(391)		(14)
Stock-based compensation	348		313
Acquired IPR&D and milestones	164		150
Impairment of intangible assets	—		710
Other, net	(45)		(128)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(702)		(195)
Inventories	(75)		(185)
Prepaid expenses and other assets	284		(167)
Accounts payable and other liabilities	362		(451)
Income tax assets and liabilities, net	378		187
Cash flows from operating activities	4,040		4,193

Cash flows from investing activities
Acquisition of businesses, net of cash acquired	(9,199)		—
Other acquisitions and investments	(190)		(353)
Acquisitions of property and equipment	(193)		(175)
Purchases of investment securities	(6)		(19)
Sales and maturities of investment securities	6		22
Other, net	(6)		26
Cash flows from investing activities	(9,588)		(499)

Cash flows from financing activities
Proceeds from issuance of other short-term borrowings	5,008		—
Repayments of other short-term borrowings	(5,005)		—
Proceeds from issuance of long-term debt	14,963		—
Repayments of long-term debt and finance lease obligations	(103)		(1,351)
Debt issuance costs	(99)		—
Dividends paid	(2,772)		(2,661)
Purchases of treasury stock	(1,324)		(1,955)
Proceeds from the exercise of stock options	127		65
Payments of contingent consideration liabilities	—		(311)
Other, net	24		21
Cash flows from financing activities	10,819		(6,192)
Effect of exchange rate changes on cash and equivalents	(18)		8
Net change in cash and equivalents	5,253		(2,490)
Cash and equivalents, beginning of period	12,814		9,201

Cash and equivalents, end of period	$	18,067	$	6,711


(in millions)
Assets acquired and liabilities assumed
Cash and equivalents	$	591
Accounts receivable	171
Inventories	211
Prepaid expenses and other current assets	40
Property and equipment, net	7
Intangible assets, net
Developed product rights	7,200
License agreements	125
Acquired in-process research and development	1,280
Other noncurrent assets	273
Current portion of long-term debt	(99)
Accounts payable and accrued liabilities	(312)
Deferred income taxes	(899)
Other long-term liabilities	(47)
Total identifiable net assets	8,541
Goodwill	1,249
Total assets acquired and liabilities assumed	$	9,790


(in millions)
Balance as of December 31, 2023	$	32,293
Additions(a)	1,249
Foreign currency translation adjustments	(116)
Balance as of March 31, 2024	$	33,426


	March 31, 2024						December 31, 2023
(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	$	82,219	$	(24,059)	$	58,160	$	75,142	$	(22,455)	$	52,687
License agreements	8,316		(5,831)		2,485		8,191		(5,571)		2,620
Total definite-lived intangible assets	90,535		(29,890)		60,645		83,333		(28,026)		55,307
Indefinite-lived intangible assets	1,580		—		1,580		303		—		303
Total intangible assets, net	$	92,115	$	(29,890)	$	62,225	$	83,636	$	(28,026)	$	55,610


(in millions)
Accrued balance as of December 31, 2023	$	196
Restructuring charges	14
Payments and other adjustments	(32)
Accrued balance as of March 31, 2024	$	178


	Fair value – Derivatives in asset position					Fair value – Derivatives in liability position
(in millions)	Balance sheet caption	March 31, 2024		December 31, 2023		Balance sheet caption	March 31, 2024		December 31, 2023
Foreign currency forward exchange contracts
Designated as cash flow hedges	Prepaid expenses and other	$	30	$	12	Accounts payable and accrued liabilities	$	4	$	32

Designated as net investment hedges	Prepaid expenses and other	53		13		Accounts payable and accrued liabilities	38		66
Designated as net investment hedges	Other assets	6		—		Other long-term liabilities	3		69
Not designated as hedges	Prepaid expenses and other	10		41		Accounts payable and accrued liabilities	25		36
Interest rate swap contracts
Designated as fair value hedges	Prepaid expenses and other	—		—		Accounts payable and accrued liabilities	1		—
Designated as fair value hedges	Other assets	—		—		Other long-term liabilities	357		293
Total derivatives		$	99	$	66		$	428	$	496


		Three months ended March 31,
(in millions)	Statement of earnings caption		2024		2023
Foreign currency forward exchange contracts
Designated as cash flow hedges	Cost of products sold		$	12	$	30
Designated as net investment hedges	Interest expense, net		27		28
Not designated as hedges	Net foreign exchange loss		(18)		30
Treasury rate lock agreements designated as cash flow hedges	Interest expense, net		6		6
Interest rate swap contracts
Designated as fair value hedges	Interest expense, net		(65)		35
Debt designated as hedged item in fair value hedges	Interest expense, net		65		(35)


			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	$	18,067	$	7,221	$	10,846	$	—
Money market funds and time deposits	10		—		10		—
Debt securities	26		—		26		—
Equity securities	110		84		26		—

Foreign currency contracts	99		—		99		—

Total assets	$	18,312	$	7,305	$	11,007	$	—
Liabilities
Interest rate swap contracts	$	358	$	—	$	358	$	—
Foreign currency contracts	70		—		70		—

Contingent consideration	20,159		—		—		20,159
Total liabilities	$	20,587	$	—	$	428	$	20,159


(in millions)	March 31, 2024		December 31, 2023
Finished goods	$	1,258	$	1,356
Work-in-process	1,890		1,643
Raw materials	1,097		1,100
Inventories	$	4,245	$	4,099


	Three months ended March 31,
(in millions)		2024		2023
United States - Janssen's share of profits (included in cost of products sold)		$	283	$	297
International - AbbVie's share of profits (included in net revenues)		228		240
Global - AbbVie's share of other costs (included in respective line items)		42		55


	Three months ended March 31,
(in millions)		2024		2023
Genentech's share of profits, including royalties (included in cost of products sold)		$	227	$	202
AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A)		9		11
AbbVie's share of development costs (included in R&D)		19		28


	March 31, 2024		December 31, 2023
	Range	Weighted average(a)	Range	Weighted average(a)
Discount rate	4.6% - 5.8%	4.8%	4.3%- 5.9%	4.5%
Probability of payment for royalties by indication(b)	89% - 100%	99%	89% - 100%	99%

Projected year of payments	2024 - 2034	2030	2024 - 2034	2027


					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	$	3	$	—	$	3	$	—
Current portion of long-term debt and finance lease obligations, excluding fair value hedges	10,194		10,021		9,687		334		—
Long-term debt and finance lease obligations, excluding fair value hedges	64,140		60,887		60,469		418		—
Total liabilities	$	74,337	$	70,911	$	70,156	$	755	$	—


(in millions)		March 31, 2024
Senior Notes
	4.80% Senior Notes due 2027	$	2,250
	4.80% Senior Notes due 2029	2,500
	4.95% Senior Notes due 2031	2,000
	5.05% Senior Notes due 2034	3,000
	5.35% Senior Notes due 2044	750
	5.40% Senior Notes due 2054	3,000
	5.50% Senior Notes due 2064	1,500
Total acquired debt outstanding		$	15,000


		Defined benefit plans					Other post- employment plans
	Three months ended March 31,					Three months ended March 31,
(in millions)		2024		2023			2024		2023
Service cost		$	72	$	68		$	11	$	8
Interest cost		113		107			10		9
Expected return on plan assets		(197)		(180)			—		—
Amortization of prior service credit		—		—			(9)		(9)
Amortization of actuarial loss		13		4			4		3
Net periodic benefit cost		$	1	$	(1)		$	16	$	11


2024				2023
Date Declared	Payment Date	Dividend Per Share		Date Declared	Payment Date	Dividend Per Share
02/15/24	05/15/24	$	1.55	10/26/23	02/15/24	$	1.55
				09/08/23	11/15/23	$	1.48
				06/22/23	08/15/23	$	1.48
				02/16/23	05/15/23	$	1.48


(in millions)	Foreign currency translation adjustments		Net investment hedging activities		Pension and post-employment benefits		Cash flow hedging activities		Total
Balance as of December 31, 2023	$	(1,106)	$	65	$	(1,488)	$	224	$	(2,305)
Other comprehensive income (loss) before reclassifications	(396)		228		3		44		(121)
Net losses (gains) reclassified from accumulated other comprehensive loss	—		(21)		7		(14)		(28)
Net current-period other comprehensive income (loss)	(396)		207		10		30		(149)
Balance as of March 31, 2024	$	(1,502)	$	272	$	(1,478)	$	254	$	(2,454)


	Three months ended March 31,
(in millions) (brackets denote gains)		2024		2023
Net investment hedging activities
Gains on derivative amount excluded from effectiveness testing(a)		$	(27)	$	(28)
Tax expense		6		6
Total reclassifications, net of tax		$	(21)	$	(22)
Pension and post-employment benefits
Amortization of actuarial losses (gains) and other(b)		$	8	$	(2)
Tax benefit		(1)		—
Total reclassifications, net of tax		$	7	$	(2)
Cash flow hedging activities
Gains on foreign currency forward exchange contracts(c)		$	(12)	$	(30)
Gains on treasury rate lock agreements(a)		(6)		(6)

Tax expense		4		5
Total reclassifications, net of tax		$	(14)	$	(31)


	Three months ended March 31,			Percent change
						At actual currency rates			At constant currency rates
(dollars in millions)		2024	2023
United States				$	9,041		$	9,201		(1.7)	%	(1.7)	%
International				3,269			3,024			8.1	%	11.6	%
Net revenues				$	12,310		$	12,225		0.7	%	1.6	%


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
January 1, 2024 - January 31, 2024	994	(1)	$160.15	(1)	—	$4,808,991,028
February 1, 2024 - February 28, 2024	845	(1)	$171.75	(1)	—	$4,808,991,028
March 1, 2024 - March 31, 2024	5,317,518	(1)	$180.45	(1)	5,316,656	$3,849,610,303
Total	5,319,357	(1)	$180.44	(1)	5,316,656	$3,849,610,303


Exhibit No.						Exhibit Description

10.1						Form of AbbVie Inc. Performance-Vested Restricted Stock Unit Agreement*

10.2						Form of AbbVie Inc. Performance Share Award Agreement*

10.3						Form of AbbVie Inc. Non-Employee Director RSU Agreement (US)*

10.4						Form of AbbVie Inc. Non-Qualified Stock Option Agreement*

10.5						Form of AbbVie Inc. Retention RSU Agreement - Ratable Vesting*

31.1						Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

31.2						Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following financial statements and notes from the AbbVie Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed on May 3, 2024, 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.

104						Cover Page Interactive Data File (the cover page from the AbbVie Inc. Quarterly Report on Form 10-Q formatted as Inline XBRL and contained in Exhibit 101).


						ABBVIE INC.


			By:			/s/ Scott T. Reents
						Scott T. Reents
						Executive Vice President,
						Chief Financial Officer (Principal Financial Officer)


Date:	May 3, 2024	/s/ Richard A. Gonzalez
		Richard A. Gonzalez, Chairman of the Board
		and Chief Executive Officer


/s/ Richard A. Gonzalez
Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer
May 3, 2024


/s/ Scott T. Reents
Scott T. Reents
Executive Vice President, Chief Financial Officer
May 3, 2024