Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling $3.3 billion at September 30, 2025 and $1.9 billion at December 31, 2024, are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than 18 months. Accumulated gains and losses as of September 30, 2025 are reclassified from accumulated other comprehensive income (loss) (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement.

The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are reflected in net foreign exchange loss (gain) in the condensed consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $10.1 billion at September 30, 2025 and $5.9 billion at December 31, 2024.

The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. The company had an aggregate principal amount of senior Euro notes designated as net investment hedges of €3.1 billion at September 30, 2025 and December 31, 2024. In addition, the company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling €6.5 billion, SEK1.9 billion, CAD500 million and CHF80 million at September 30, 2025 and €6.2 billion, SEK1.4 billion, CAD500 million and CHF50 million at December 31, 2024. The company uses the spot method of assessing hedge effectiveness for derivative instruments designated as net investment hedges. Realized and unrealized gains and losses from these hedges are included in AOCI and the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense, net over the life of the hedging instrument.

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $3.5 billion at September 30, 2025 and December 31, 2024. The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.

The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets:


	Fair value – Derivatives in asset position					Fair value – Derivatives in liability position
(in millions)	Balance sheet caption	September 30, 2025		December 31, 2024		Balance sheet caption	September 30, 2025		December 31, 2024
Foreign currency forward exchange contracts
Designated as cash flow hedges	Prepaid expenses and other	$	29	$	119	Accounts payable and accrued liabilities	$	73	$	5
Designated as cash flow hedges	Other assets	—		—		Other long-term liabilities	1		—
Designated as net investment hedges	Prepaid expenses and other	—		4		Accounts payable and accrued liabilities	165		—
Designated as net investment hedges	Other assets	—		148		Other long-term liabilities	326		—
Not designated as hedges	Prepaid expenses and other	29		42		Accounts payable and accrued liabilities	19		30


Interest rate swap contracts

Designated as fair value hedges	Other assets	67		—		Other long-term liabilities	106		231
Total derivatives		$	125	$	313		$	690	$	266

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss):


	Three months ended September 30,				Nine months ended September 30,
(in millions)	2025		2024		2025		2024
Foreign currency forward exchange contracts
Designated as cash flow hedges	$	46	$	(45)	$	(108)	$	30
Designated as net investment hedges	53		(238)		(710)		(16)

Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax losses of $36 million into cost of products sold for foreign currency cash flow hedges and pre-tax gains of $21 million into interest expense, net for other cash flow hedges during the next 12 months.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive income (loss) pre-tax losses of $1 million for the three months and $417 million for the nine months ended September 30, 2025 and pre-tax losses of $151 million for the three months and pre-tax gains of $56 million for the nine months ended September 30, 2024.

The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings, including the net gains (losses) reclassified out of AOCI into net earnings. See Note 10 for the amount of net gains (losses) reclassified out of AOCI.


		Three months ended September 30,				Nine months ended September 30,
(in millions)	Statement of earnings caption	2025		2024		2025		2024
Foreign currency forward exchange contracts
Designated as cash flow hedges	Cost of products sold	$	41	$	19	$	69	$	41
Designated as net investment hedges	Interest expense, net	37		32		108		90
Not designated as hedges	Net foreign exchange loss (gain)	(1)		(30)		(47)		(14)
Interest rate swap contracts
Designated as fair value hedges	Interest expense, net	6		60		108		49
Debt designated as hedged item in fair value hedges	Interest expense, net	(6)		(60)		(108)		(49)
Other	Interest expense, net	5		6		15		18

•Level 2 – Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and

•Level 3 – Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company’s management about the assumptions market participants would use in pricing the asset or liability.

The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of September 30, 2025:


			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	$	5,629	$	5,283	$	346	$	—
Money market funds and time deposits	10		—		10		—
Debt securities	34		—		34		—
Equity securities	117		81		36		—
Interest rate swap contracts	67		—		67		—
Foreign currency contracts	58		—		58		—

Total assets	$	5,915	$	5,364	$	551	$	—
Liabilities
Interest rate swap contracts	$	106	$	—	$	106	$	—

Foreign currency contracts	584		—		584		—
Financing liability	365		—		—		365
Contingent consideration	24,649		—		—		24,649
Total liabilities	$	25,704	$	—	$	690	$	25,014

The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of December 31, 2024:


			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	$	5,524	$	5,179	$	345	$	—
Money market funds and time deposits	10		—		10		—
Debt securities	33		—		33		—
Equity securities	98		70		28		—
Foreign currency contracts	313		—		313		—
Total assets	$	5,978	$	5,249	$	729	$	—
Liabilities
Interest rate swap contracts	$	231	$	—	$	231	$	—
Foreign currency contracts	35		—		35		—
Financing liability	328		—		—		328
Contingent consideration	21,666		—		—		21,666
Total liabilities	$	22,260	$	—	$	266	$	21,994

Money market funds and time deposits are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves. Equity securities primarily consist of investments for which the fair values were determined by using the published market prices per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company were valued using observable market inputs including published interest rate curves and both forward and spot prices for foreign currencies.

The financing liability is related to financing arrangements which the company elected to account for in accordance with the fair value option, as permitted under ASC 825 Financial Instruments. The fair value measurement of the financing liability was determined based on significant unobservable inputs. Potential payments are estimated by applying a probability-weighted expected payment model, which are then discounted to present value. Changes to the fair value of the financing liability can result from changes to one or a number of inputs, including discount rates, estimated probabilities and timing of achieving milestones and estimated amounts of future sales. The change in fair value recognized in net earnings is recorded in other expense, net in the condensed consolidated statements of earnings and the change in fair value attributable to instrument-specific credit risk is recognized in other comprehensive income (loss). Changes in fair value recognized in other expense, net and in other comprehensive income (loss) for the three and nine months ended September 30, 2025 were insignificant.

The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs, including the discount rate, estimated probabilities and timing of achieving specified development, regulatory and commercial milestones and the estimated amount of future sales of the acquired products. The potential contingent consideration payments are estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which are then discounted to present value. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of certain of these inputs. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period.

The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:


	September 30, 2025		December 31, 2024
	Range	Weighted average(a)	Range	Weighted average(a)
Discount rate	3.8% - 4.6%	4.1%	4.6% - 5.2%	4.8%
Probability of payment for royalties by indication	100%	100%	100%	100%

Projected year of payments	2025 - 2034	2029	2025 - 2034	2029

There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy. The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs:


	Nine months ended September 30,
(in millions)	2025		2024
Beginning balance	$	21,666	$	19,890
Additions(a)	78		—
Change in fair value recognized in net earnings	5,089		3,492
Payments	(2,184)		(1,456)
Ending balance	$	24,649	$	21,926

Certain financial instruments are carried at historical cost or some basis other than fair value. The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2025 are shown in the table below:


					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	$	3,790	$	3,785	$	—	$	3,785	$	—
Current portion of long-term debt and finance lease obligations, excluding fair value hedges	2,017		2,010		1,991		19		—
Long-term debt and finance lease obligations, excluding fair value hedges and financing liability	62,645		60,084		57,647		2,437		—
Total liabilities	$	68,452	$	65,879	$	59,638	$	6,241	$	—

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2024 are shown in the table below:


					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

Current portion of long-term debt and finance lease obligations, excluding fair value hedges	$	6,797	$	6,767	$	6,620	$	147	$	—
Long-term debt and finance lease obligations, excluding fair value hedges and financing liability	60,243		55,836		53,441		2,395		—
Total liabilities	$	67,040	$	62,603	$	60,061	$	2,542	$	—

AbbVie also holds investments in equity securities that do not have readily determinable fair values. The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur. The carrying amount of these investments was $172 million as of September 30, 2025 and $169 million as of December 31, 2024. No significant cumulative upward or downward adjustments have been recorded for these investments as of September 30, 2025.

Of total net accounts receivable, three U.S. wholesalers accounted for 81% as of September 30, 2025 and December 31, 2024, and substantially all of AbbVie’s pharmaceutical product net revenues in the United States were to these three wholesalers.

The notes are unsecured, unsubordinated obligations of AbbVie and will rank equally in right of payment with all of AbbVie’s existing and future unsecured, unsubordinated indebtedness, liabilities and other obligations. AbbVie may redeem the fixed-rate senior notes prior to maturity at a redemption price equal to the greater of the principal amount or the sum of present values of the remaining scheduled payments of principal and interest plus a make-whole premium. AbbVie may also redeem the fixed-rate senior notes at par between one and six months prior to maturity.

Short-term borrowings included commercial paper borrowings of $1.8 billion as of September 30, 2025, of which $791 million had original maturities greater than three months. There were no commercial paper amounts outstanding as of December 31, 2024. The weighted-average interest rate on commercial paper borrowings was 4.59% for the nine months ended September 30, 2025 and 5.54% for the nine months ended September 30, 2024.

In April 2025, AbbVie entered into a $4.0 billion 364-day term loan credit agreement. In May 2025, AbbVie borrowed $2.0 billion under this term loan credit agreement which was outstanding and included in short-term borrowings on the condensed consolidated balance sheet as of September 30, 2025. Borrowings under the term loan bear interest at adjusted Secured Overnight Financing Rate Reference Rate (SOFR) +0.7%. The term loan may be prepaid without penalty upon prior notice and contains covenants, all of which the company was in compliance with as of September 30, 2025.

In January 2025, AbbVie entered into a new $3.0 billion five-year revolving credit facility that matures in January 2030 which is in addition to the existing $5.0 billion five-year revolving credit facility that matures in March 2028. The revolving credit facilities are available to support AbbVie’s commercial paper program and enable the company to borrow funds to meet liquidity requirements on an unsecured basis at variable interest rates and contain various covenants. At September 30, 2025, the company was in compliance with all covenants, and commitment fees under the credit facility were insignificant. No amounts were outstanding under the company's credit facilities as of September 30, 2025 and December 31, 2024.

In connection with the acquisitions of ImmunoGen and Cerevel Therapeutics, in February 2024, the company issued $15.0 billion aggregate principal amount of unsecured senior notes. The notes are unsecured, unsubordinated obligations of AbbVie and will rank equally in right of payment with all of AbbVie’s existing and future unsecured, unsubordinated indebtedness, liabilities and other obligations. AbbVie may redeem the fixed-rate senior notes prior to maturity at a redemption price equal to the greater of the principal amount or the sum of present values of the remaining scheduled payments of principal and interest on the fixed-rate senior notes to be redeemed plus a make-whole premium. AbbVie may also redeem the fixed-rate senior notes at par between one and six months prior to maturity. In connection with the offering, debt issuance costs incurred totaled $99 million and debt discounts totaled $37 million, which are being amortized over the respective terms of the notes to interest expense, net in the condensed consolidated statements of earnings.

AbbVie used the net proceeds received from the issuance of the notes to finance the acquisition of ImmunoGen, repay its term loan, repay commercial paper borrowings, pay fees and expenses in respect of the foregoing, finance general corporate purposes and, together with cash on hand, fund AbbVie’s acquisition of Cerevel Therapeutics.

In December 2023, AbbVie entered into a $9.0 billion 364-day bridge credit agreement and $5.0 billion 364-day term loan credit agreement. In February 2024, AbbVie borrowed and repaid $5.0 billion under the term loan credit agreement. Interest charged on this borrowing was based on SOFR +0.975% with an effective interest rate of 6.29%. Subsequent to the $15.0 billion issuance of senior notes, AbbVie terminated both the bridge and term loan credit agreements in the first quarter of 2024. In February 2024, concurrent with the ImmunoGen acquisition, the company assumed and repaid an ImmunoGen senior secured term loan at a fair value of $99 million.