Financial Instruments and Fair Value Measures (Tables)
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12 Months Ended |
Dec. 31, 2020 |
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| Fair Value Disclosures [Abstract] |
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| Summary of amounts and location of derivatives on the consolidated balance sheets |
The following table summarizes the amounts and location of AbbVie's derivative instruments on the consolidated balance sheets: | | | | | | | | | | | | | | | | | | | | | | | | | Fair value - Derivatives in asset position | | Fair value -
Derivatives in liability position | | as of December 31 (in millions) | Balance sheet caption | 2020 | 2019 | | Balance sheet caption | 2020 | 2019 | | Foreign currency forward exchange contracts | | | | | | | | | Designated as cash flow hedges | Prepaid expenses and other | $ | 2 | | $ | 3 | | | Accounts payable and accrued liabilities | $ | 82 | | $ | 14 | | | | | | | | | | | Designated as cash flow hedges | Other assets | — | | — | | | Other long-term liabilities | 6 | | — | | | Designated as net investment hedges | Prepaid expenses and other | — | | — | | | Accounts payable and accrued liabilities | 11 | | 24 | | | Not designated as hedges | Prepaid expenses and other | 49 | | 19 | | | Accounts payable and accrued liabilities | 33 | | 18 | | | Interest rate swap contracts | | | | | | | | | Designated as cash flow hedges | Prepaid expenses and other | — | | — | | | Accounts payable and accrued liabilities | 14 | | — | | | Designated as cash flow hedges | Other assets | — | | 3 | | | Other long-term liabilities | 20 | | — | | | Designated as fair value hedges | Prepaid expenses and other | 7 | | — | | | Accounts payable and accrued liabilities | — | | 2 | | | Designated as fair value hedges | Other assets | 131 | | 28 | | | Other long-term liabilities | — | | 74 | | | Total derivatives | | $ | 189 | | $ | 53 | | | | $ | 166 | | $ | 132 | |
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| Schedule of pre-tax amounts of derivatives recognized in other comprehensive income (loss) |
The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | years ended in December 31 (in millions) | | 2020 | | 2019 | | 2018 | | Foreign currency forward exchange contracts | | | | | | | | Designated as cash flow hedges | | $ | (71) | | | $ | (5) | | | $ | 175 | | | Designated as net investment hedges | | (95) | | | 33 | | | — | | | Interest rate swap contracts designated as cash flow hedges | | (53) | | | 4 | | | — | | | Treasury rate lock agreements designated as cash flow hedges | | — | | | 383 | | | — | |
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| Summary of pre-tax amounts and location of derivatives recognized in the consolidated statement of earnings |
The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the consolidated statements of earnings, including the net gains (losses) reclassified out of AOCI into net earnings. See Note 13 for the amount of net gains (losses) reclassified out of AOCI. | | | | | | | | | | | | | | | | | | | | | | years ended December 31 (in millions) | Statement of earnings caption | 2020 | | 2019 | | 2018 | | Foreign currency forward exchange contracts | | | | | | | | Designated as cash flow hedges | Cost of products sold | $ | 23 | | | $ | 167 | | | $ | (161) | | | Designated as net investment hedges | Interest expense, net | 18 | | | 27 | | | — | | | Not designated as hedges | Net foreign exchange loss | 58 | | | (70) | | | 83 | | | Treasury rate lock agreements designated as cash flow hedges | Interest expense, net | 24 | | | 3 | | | — | | | Interest rate swap contracts | | | | | | | | Designated as cash flow hedges | Interest expense, net | (17) | | | 1 | | | — | | | Designated as fair value hedges | Interest expense, net | 365 | | | 418 | | | (71) | | | Debt designated as hedged item in fair value hedges | Interest expense, net | (365) | | | (418) | | | 71 | |
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| Summary of bases used to measure assets and liabilities carried at fair value on a recurring basis |
The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the consolidated balance sheet as of December 31, 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | $ | 8,449 | | | $ | 2,758 | | | $ | 5,691 | | | $ | — | | | Money market funds and time deposits | 12 | | | — | | | 12 | | | — | | | Debt securities | 50 | | | — | | | 50 | | | — | | | Equity securities | 159 | | | 149 | | | 10 | | | — | | | Interest rate swap contracts | 138 | | | — | | | 138 | | | — | | | Foreign currency contracts | 51 | | | — | | | 51 | | | — | | | | | | | | | | | Total assets | $ | 8,859 | | | $ | 2,907 | | | $ | 5,952 | | | $ | — | | | Liabilities | | | | | | | | | Interest rate swap contracts | $ | 34 | | | $ | — | | | $ | 34 | | | $ | — | | | Foreign currency contracts | 132 | | | — | | | 132 | | | — | | | Contingent consideration | 12,997 | | | — | | | — | | | 12,997 | | | Total liabilities | $ | 13,163 | | | $ | — | | | $ | 166 | | | $ | 12,997 | |
The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the consolidated balance sheet as of December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | $ | 39,924 | | | $ | 1,542 | | | $ | 38,382 | | | $ | — | | | Debt securities | 3 | | | — | | | 3 | | | — | | | Equity securities | 24 | | | 24 | | | — | | | — | | | Interest rate swap contracts | 31 | | | — | | | 31 | | | — | | | Foreign currency contracts | 22 | | | — | | | 22 | | | — | | | Total assets | $ | 40,004 | | | $ | 1,566 | | | $ | 38,438 | | | $ | — | | | Liabilities | | | | | | | | | Interest rate swap contracts | $ | 76 | | | $ | — | | | $ | 76 | | | $ | — | | | Foreign currency contracts | 56 | | | — | | | 56 | | | — | | | Contingent consideration | 7,340 | | | — | | | — | | | 7,340 | | | Total liabilities | $ | 7,472 | | | $ | — | | | $ | 132 | | | $ | 7,340 | |
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| Summary of significant level 3 unobservable inputs |
The fair value of the company's contingent consideration liabilities as of December 31, 2020 was calculated using the following significant unobservable inputs: | | | | | | | | | | Range | Weighted Average(a) | | Discount rate | 0.1% - 2.2% | 1.1% | | Probability of payment for unachieved milestones | 56% - 92% | 64% | Probability of payment for royalties by indication(b) | 56% - 100% | 91% | | | | | Projected year of payments | 2021 - 2034 | 2027 |
(a)Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities. (b)Excludes early stage indications with 0% estimated probability of payment and includes approved indications with 100% probability of payment. Excluding approved indications, the estimated probability of payment ranged from 56% to 89% at December 31, 2020.
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| Summary of changes in fair value of Level 3 inputs |
The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level 3 inputs: | | | | | | | | | | | | | | | | | | | years ended December 31 (in millions) | 2020 | | 2019 | | 2018 | | Beginning balance | $ | 7,340 | | | $ | 4,483 | | | $ | 4,534 | | Additions(a) | 225 | | | — | | | — | | | Change in fair value recognized in net earnings | 5,753 | | | 3,091 | | | 49 | | | Payments | (321) | | | (234) | | | (100) | | | Ending balance | $ | 12,997 | | | $ | 7,340 | | | $ | 4,483 | |
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| Schedule of book values, approximate fair values and bases used to measure certain financial instruments |
The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2020 are shown in the table below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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) | | Liabilities | | | | | | | | | | Short-term borrowings | $ | 34 | | $ | 34 | | | $ | — | | | $ | 34 | | | $ | — | | | Current portion of long-term debt and finance lease obligations, excluding fair value hedges | 8,461 | | 8,542 | | | 8,249 | | | 293 | | | — | | | Long-term debt and finance lease obligations, excluding fair value hedges | 77,283 | | 87,761 | | | 86,137 | | | 1,624 | | | — | | | Total liabilities | $ | 85,778 | | $ | 96,337 | | | $ | 94,386 | | | $ | 1,951 | | | $ | — | |
The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2019 are shown in the table below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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) | | Liabilities | | | | | | | | | | | | | | | | | | | Current portion of long-term debt and finance lease obligations, excluding fair value hedges | $ | 3,755 | | $ | 3,760 | | | $ | 3,753 | | | $ | 7 | | | $ | — | | | Long-term debt and finance lease obligations, excluding fair value hedges | 63,021 | | 66,651 | | | 66,631 | | | 20 | | | — | | | Total liabilities | $ | 66,776 | | $ | 70,411 | | | $ | 70,384 | | | $ | 27 | | | $ | — | |
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