v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases 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 caption20222021
Assets
OperatingOther assets$737 $762 
FinanceProperty and equipment, net25 33 
Total lease assets$762 $795 
Liabilities
Operating
CurrentAccounts payable and accrued liabilities$166 $178 
NoncurrentOther long-term liabilities754 713 
Finance
CurrentCurrent portion of long-term debt and finance lease obligations17 9 
NoncurrentLong-term debt and finance lease obligations17 25 
Total lease liabilities$954 $925 
The following table summarizes the lease costs recognized in the consolidated statements of earnings:
years ended December 31 (in millions)202220212020
Operating lease cost$201 $226 $192 
Short-term lease cost67 56 59 
Variable lease cost71 71 60 
Total lease cost$339 $353 $311 
In December 2022, the company entered into an agreement to sublease a portion of its Madison, New Jersey office space through the end of the original lease maturity in 2030. As a result of this agreement, the company recognized an impairment loss on its right-of-use asset of $69 million and wrote-off the related leasehold improvements of $37 million. These losses were recorded to SG&A expense in the consolidated statements of earnings for the year ended December 31, 2022. The company used a discounted cash flows method to value the right-of-use asset to determine the impairment amount.
Sublease income and finance lease costs were insignificant in 2022, 2021 and 2020.
The following table presents the weighted-average remaining lease term and weighted-average discount rate for operating and finance leases:
years ended December 31202220212020
Weighted-average remaining lease term (years)
Operating878
Finance233
Weighted-average discount rate
Operating2.6 %2.4 %2.5 %
Finance1.5 %1.1 %1.4 %
The following table presents supplementary cash flow information regarding the company's leases:
years ended December 31 (in millions)202220212020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$212 $236 $185 
Right-of-use assets obtained in exchange for new operating lease liabilities235 66 692 
Finance lease cash flows were insignificant in 2022, 2021 and 2020. Right-of-use assets obtained in exchange for new operating lease liabilities as of December 31, 2020 included $453 million of right-of-use assets acquired in the Allergan acquisition.
The following table summarizes the future maturities of AbbVie's operating and finance lease liabilities as of December 31, 2022:
(in millions)Operating
leases		Finance
leases
Total (a)
2023$185 $17 $202 
2024152 7 159 
2025130 5 135 
2026113 6 119 
202790 — 90 
Thereafter361 — 361 
Total lease payments1,031 35 1,066 
Less: Interest111 1 112 
Present value of lease liabilities$920 $34 $954 
(a)Lease payments recognized as part of lease liabilities for optional renewal periods are insignificant.
Leases 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 caption20222021
Assets
OperatingOther assets$737 $762 
FinanceProperty and equipment, net25 33 
Total lease assets$762 $795 
Liabilities
Operating
CurrentAccounts payable and accrued liabilities$166 $178 
NoncurrentOther long-term liabilities754 713 
Finance
CurrentCurrent portion of long-term debt and finance lease obligations17 9 
NoncurrentLong-term debt and finance lease obligations17 25 
Total lease liabilities$954 $925 
The following table summarizes the lease costs recognized in the consolidated statements of earnings:
years ended December 31 (in millions)202220212020
Operating lease cost$201 $226 $192 
Short-term lease cost67 56 59 
Variable lease cost71 71 60 
Total lease cost$339 $353 $311 
In December 2022, the company entered into an agreement to sublease a portion of its Madison, New Jersey office space through the end of the original lease maturity in 2030. As a result of this agreement, the company recognized an impairment loss on its right-of-use asset of $69 million and wrote-off the related leasehold improvements of $37 million. These losses were recorded to SG&A expense in the consolidated statements of earnings for the year ended December 31, 2022. The company used a discounted cash flows method to value the right-of-use asset to determine the impairment amount.
Sublease income and finance lease costs were insignificant in 2022, 2021 and 2020.
The following table presents the weighted-average remaining lease term and weighted-average discount rate for operating and finance leases:
years ended December 31202220212020
Weighted-average remaining lease term (years)
Operating878
Finance233
Weighted-average discount rate
Operating2.6 %2.4 %2.5 %
Finance1.5 %1.1 %1.4 %
The following table presents supplementary cash flow information regarding the company's leases:
years ended December 31 (in millions)202220212020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$212 $236 $185 
Right-of-use assets obtained in exchange for new operating lease liabilities235 66 692 
Finance lease cash flows were insignificant in 2022, 2021 and 2020. Right-of-use assets obtained in exchange for new operating lease liabilities as of December 31, 2020 included $453 million of right-of-use assets acquired in the Allergan acquisition.
The following table summarizes the future maturities of AbbVie's operating and finance lease liabilities as of December 31, 2022:
(in millions)Operating
leases		Finance
leases
Total (a)
2023$185 $17 $202 
2024152 7 159 
2025130 5 135 
2026113 6 119 
202790 — 90 
Thereafter361 — 361 
Total lease payments1,031 35 1,066 
Less: Interest111 1 112 
Present value of lease liabilities$920 $34 $954 
(a)Lease payments recognized as part of lease liabilities for optional renewal periods are insignificant.