In May 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (the 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)	2022		2021		2020
Cost of products sold	$	38	$	46	$	47
Research and development	232		226		247
Selling, general and administrative	401		420		459
Pre-tax compensation expense	671		692		753
Tax benefit	122		126		131
After-tax compensation expense	$	549	$	566	$	622

Stock options awarded to employees typically have a contractual term of 10 years and generally vest in one-third increments over a three-year period. The exercise price is equal to at least 100% of the market value on the date of grant. The fair value is determined using the Black-Scholes model. The weighted-average grant-date fair values of stock options granted were $22.83 in 2022, $16.28 in 2021 and $12.14 in 2020.

In connection with the Allergan acquisition, during the second quarter of 2020, AbbVie issued 11.2 million stock options to holders of Allergan options as a result of the conversion of such options. These options were fair-valued using a lattice valuation model. Refer to Note 5 for additional information regarding the Allergan acquisition.

The following table summarizes AbbVie stock option activity in 2022:


(options in thousands, aggregate intrinsic value in millions)	Options	Weighted- average exercise price		Weighted-average remaining life (in years)	Aggregate intrinsic value
Outstanding at December 31, 2021	12,374	$	81.98	4.7	$	661
Granted	863	144.54
Exercised	(3,764)	70.85
Lapsed and forfeited	(153)	107.65
Outstanding at December 31, 2022	9,320	$	91.84	4.8	$	650
Exercisable at December 31, 2022	7,120	$	84.54	3.7	$	549

The total intrinsic value of options exercised was $295 million in 2022, $239 million in 2021 and $186 million in 2020. The total fair value of options vested during 2022 was $21 million. As of December 31, 2022, $6 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years.

RSUs awarded to employees other than senior executives and other key employees generally vest in ratable increments over a three or four-year period. Recipients of these RSUs are entitled to receive dividend equivalents as dividends are declared and paid during the RSU vesting period.

The majority of the equity awards AbbVie grants to its senior executives and other key employees are performance-based. Equity awards granted to senior executives and other key employees consist of a combination of performance-vested RSUs and performance shares as well as non-qualified stock options described above. The performance-vested RSUs have the potential to vest in one-third increments during a three-year performance period and may be earned based on AbbVie’s return on invested capital (ROIC) performance relative to a defined peer group of pharmaceutical, biotech and life science companies. The recipient may receive one share of AbbVie common stock for each vested award. The performance shares

have the potential to vest over a three-year performance period and may be earned based on AbbVie’s EPS achievement and AbbVie’s total stockholder return (TSR) (a market condition) relative to a defined peer group of pharmaceutical, biotech and life sciences companies. Dividend equivalents on performance-vested RSUs and performance shares accrue during the performance period and are payable at vesting only to the extent that shares are earned.

The weighted-average grant-date fair value of RSUs and performance shares generally is determined based on the number of shares/units granted and the quoted price of AbbVie’s common stock on the date of grant. The weighted-average grant-date fair values of performance shares with a TSR market condition are determined using the Monte Carlo simulation model.

The following table summarizes AbbVie RSU and performance share activity for 2022:


(share units in thousands)	Share units	Weighted-average grant date fair value
Outstanding at December 31, 2021	14,890	$	94.93
Granted	5,943	138.73
Vested	(6,958)	89.31
Forfeited	(844)	111.45
Outstanding at December 31, 2022	13,031	$	116.84

In connection with the Allergan acquisition, during the second quarter of 2020, AbbVie issued 8.2 million RSUs to holders of Allergan equity awards based on a conversion factor described in the transaction agreement. Refer to Note 5 for additional information regarding the Allergan acquisition.

Cash dividends declared per common share totaled $5.71 in 2022, $5.31 in 2021 and $4.84 in 2020. The following table summarizes quarterly cash dividends declared during 2022, 2021 and 2020:

2022

2021

2020

Date Declared

Payment Date

Dividend Per Share

Date Declared

Payment Date

Dividend Per Share

Date Declared

Payment Date

Dividend Per Share

10/28/22

02/15/23

$1.48

10/29/21

02/15/22

$1.41

10/30/20

02/16/21

$1.30

09/09/22

11/15/22

$1.41

09/10/21

11/15/21

$1.30

09/11/20

11/16/20

$1.18

06/23/22

08/15/22

$1.41

06/17/21

08/16/21

$1.30

06/17/20

08/14/20

$1.18

02/17/22

05/16/22

$1.41

02/18/21

05/14/21

$1.30

02/20/20

05/15/20

$1.18

The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management’s discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under these programs are recorded at acquisition cost, including related expenses and are available for general corporate purposes.

AbbVie repurchased 8 million shares for $1.1 billion in 2022, 6 million shares for $670 million in 2021 and 8 million shares for $757 million in 2020. AbbVie's remaining stock repurchase authorization was $1.4 billion as of December 31, 2022. On February 16, 2023, AbbVie's board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization.

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for 2022, 2021 and 2020:


(in millions) (brackets denote losses)	Foreign currency translation adjustments		Net investment hedging activities		Pension and post-employment benefits		Cash flow hedging activities		Total
Balance as of December 31, 2019	$	(928)	$	9	$	(2,965)	$	288	$	(3,596)
Other comprehensive income (loss) before reclassifications	1,511		(785)		(300)		(108)		318
Net losses (gains) reclassified from accumulated other comprehensive loss	—		(14)		198		(23)		161
Net current-period other comprehensive income (loss)	1,511		(799)		(102)		(131)		479
Balance as of December 31, 2020	583		(790)		(3,067)		157		(3,117)
Other comprehensive income (loss) before reclassifications	(1,153)		720		298		76		(59)
Net losses (gains) reclassified from accumulated other comprehensive loss	—		(21)		223		75		277
Net current-period other comprehensive income (loss)	(1,153)		699		521		151		218
Balance as of December 31, 2021	(570)		(91)		(2,546)		308		(2,899)
Other comprehensive income (loss) before reclassifications	(943)		629		915		91		692
Net losses (gains) reclassified from accumulated other comprehensive loss	—		(74)		173		(91)		8
Net current-period other comprehensive income (loss)	(943)		555		1,088		—		700
Balance as of December 31, 2022	$	(1,513)	$	464	$	(1,458)	$	308	$	(2,199)

Other comprehensive income for 2022 included pension and post-employment benefit plan gains of $1.1 billion primarily due actuarial gains driven by higher discount rates partially offset by losses on plan assets. Other comprehensive income for 2022 also included foreign currency translation adjustments totaling losses of $943 million principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets and the offsetting impact of net investment hedging activities totaling gains of $555 million. Other comprehensive income for 2021 included foreign currency translation adjustments totaling losses of $1.2 billion principally due to the impact of the weakening of the Euro on the translation of the company's Euro-denominated assets and the offsetting impact of net investment hedging activities totaling gains of $699 million. Other comprehensive income for 2020 included foreign currency translation adjustments totaling gains of $1.5 billion principally due to the impact of the strengthening of the Euro on the translation of the company's Euro-denominated assets and the offsetting impact of net investment hedging activities totaling losses of $799 million.

The table below presents the impact on AbbVie's consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss:


years ended December 31 (in millions) (brackets denote gains)	2022		2021		2020
Net investment hedging activities
Gains on derivative amount excluded from effectiveness testing(a)	$	(94)	$	(26)	$	(18)
Tax expense	20		5		4
Total reclassifications, net of tax	$	(74)	$	(21)	$	(14)
Pension and post-employment benefits
Amortization of actuarial losses and other(b)	$	221	$	283	$	251
Tax benefit	(48)		(60)		(53)
Total reclassifications, net of tax	$	173	$	223	$	198
Cash flow hedging activities
Losses (gains) on foreign currency forward exchange contracts(c)	$	(82)	$	87	$	(23)
Gains on treasury rate lock agreements(a)	(23)		(24)		(24)
Losses on interest rate swap contracts(a)	1		24		17
Tax expense (benefit)	13		(12)		7
Total reclassifications, net of tax	$	(91)	$	75	$	(23)