v3.22.4
Financial Instruments and Fair Value Measures (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
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 caption20222021Balance sheet caption20222021
Foreign currency forward exchange contracts
Designated as cash flow hedgesPrepaid expenses and other$49 $51 Accounts payable and accrued liabilities$8 $2 
Designated as cash flow hedgesOther assets1 — Other long-term liabilities— — 
Designated as net investment hedgesPrepaid expenses and other6 149 Accounts payable and accrued liabilities36 — 
Designated as net investment hedgesOther assets74 15 Other long-term liabilities47 — 
Not designated as hedgesPrepaid expenses and other33 26 Accounts payable and accrued liabilities41 13 
Interest rate swap contracts
Designated as cash flow hedgesPrepaid expenses and other— — Accounts payable and accrued liabilities— 7 
Designated as fair value hedgesPrepaid expenses and other— — Accounts payable and accrued liabilities17 — 
Designated as fair value hedgesOther assets— 26 Other long-term liabilities375 15 
Total derivatives$163 $267  $524 $37 
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:
years ended in December 31 (in millions)202220212020
Foreign currency forward exchange contracts
Designated as cash flow hedges$103 $82 $(71)
Designated as net investment hedges395 341 (95)
Interest rate swap contracts designated as cash flow hedges6 2 (53)
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 caption202220212020
Foreign currency forward exchange contracts
Designated as cash flow hedgesCost of products sold$82 $(87)$23 
Designated as net investment hedgesInterest expense, net94 26 18 
Not designated as hedgesNet foreign exchange loss(156)(100)58 
Treasury rate lock agreements designated as cash flow hedgesInterest expense, net23 24 24 
Interest rate swap contracts
Designated as cash flow hedgesInterest expense, net(1)(24)(17)
Designated as fair value hedgesInterest expense, net(402)(127)365 
Debt designated as hedged item in fair value hedgesInterest expense, net402 127 (365)
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, 2022:
Basis of fair value measurement
(in millions)TotalQuoted prices in active markets for
 identical assets
 (Level 1)		Significant other observable
 inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Assets
Cash and equivalents$9,201 $4,201 $5,000 $— 
Money market funds and time deposits21 — 21 — 
Debt securities28 — 28 — 
Equity securities91 59 32 — 
Foreign currency contracts163 — 163 — 
Total assets$9,504 $4,260 $5,244 $— 
Liabilities
Interest rate swap contracts$392 $— $392 $— 
Foreign currency contracts132 — 132 — 
Contingent consideration16,384 — — 16,384 
Total liabilities$16,908 $— $524 $16,384 
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, 2021:
Basis of fair value measurement
(in millions)TotalQuoted prices in active markets for identical assets
(Level 1)		Significant other observable
 inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Assets
Cash and equivalents$9,746 $4,451 $5,295 $— 
Money market funds and time deposits45 — 45 — 
Debt securities46 — 46 — 
Equity securities121 100 21 — 
Interest rate swap contracts26 — 26 — 
Foreign currency contracts241 — 241 — 
Total assets$10,225 $4,551 $5,674 $— 
Liabilities
Interest rate swap contracts$22 $— $22 $— 
Foreign currency contracts15 — 15 — 
Contingent consideration14,887 — — 14,887 
Total liabilities$14,924 $— $37 $14,887 
Summary of significant level 3 unobservable inputs
The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:
20222021
years ended December 31 (in millions)Range
Weighted Average(a)
Range
Weighted Average(a)
Discount rate
4.7% - 5.1%
4.8%
0.2% - 2.6%
1.7 %
Probability of payment for unachieved milestones
100% - 100%
100%
89% - 100%
90 %
Probability of payment for royalties by indication(b)
56% - 100%
99%
56% - 100%
96 %
Projected year of payments
2023 - 2034
2028
2022 - 2034
2027
(a)Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.
(b)Excluding approved indications, the estimated probability of payment was 56% at December 31, 2022 and ranged from 56% to 89% at December 31, 2021.
 [1],[2]
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)202220212020
Beginning balance$14,887 $12,997 $7,340 
Additions(a)
32 — 225 
Change in fair value recognized in net earnings2,761 2,679 5,753 
Payments(1,296)(789)(321)
Ending balance$16,384 $14,887 $12,997 
(a)Additions during the year ended December 31, 2022, represent contingent consideration liabilities assumed in the DJS acquisition. Additions during the year ended December 31, 2020, represent contingent consideration liabilities assumed in the Allergan and Luminera acquisitions (see Note 5).
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, 2022 are shown in the table below:
Basis of fair value measurement
(in millions)Book value Approximate fair valuesQuoted prices in active markets for identical assets
 (Level 1)		Significant other observable inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Liabilities
Short-term borrowings$1 $1 $— $1 $— 
Current portion of long-term debt and finance lease obligations, excluding fair value hedges4,152 4,121 3,930 191 — 
Long-term debt and finance lease obligations, excluding fair value hedges59,463 54,073 53,365 708 — 
Total liabilities$63,616 $58,195 $57,295 $900 $— 
The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2021 are shown in the table below:
Basis of fair value measurement
(in millions)Book value Approximate fair valuesQuoted prices in active markets for identical assets
 (Level 1)		Significant other observable inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Liabilities
Short-term borrowings$14 $14 $— $14 $— 
Current portion of long-term debt and finance lease obligations, excluding fair value hedges$12,455 $11,830 $11,329 $501 $— 
Long-term debt and finance lease obligations, excluding fair value hedges64,113 71,810 70,757 1,053 — 
Total liabilities$76,582 $83,654 $82,086 $1,568 $— 
[1] Excluding approved indications, the estimated probability of payment was 56% at December 31, 2022 and ranged from 56% to 89% at December 31, 2021.
[2] Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.