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Financial Instruments and Fair Value Measures (Tables)
 9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Summary of amounts and location of derivatives on the condensed consolidated balance sheets
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,
2018
December 31, 2017
 
Balance sheet caption
September 30,
2018
December 31, 2017
Foreign currency forward exchange contracts
 
 
 
 
 
 
 
Designated as cash flow hedges
Prepaid expenses and
other
$
95

$
1

 
Accounts payable and accrued liabilities
$
2

$
120

Designated as cash flow hedges
Other assets
3

—

 
Other long-term liabilities
—

—

Not designated as hedges
Prepaid expenses and
other
17

22

 
Accounts payable and accrued liabilities
14

29

Interest rate swaps designated as fair value hedges
Prepaid expenses and other
—

—

 
Accounts payable and accrued liabilities
7

8

Interest rate swaps designated as fair value hedges
Other assets
—

—

 
Other long-term liabilities
700

393

Total derivatives
 
$
115

$
23

 
 
$
723

$
550
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):
 
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
 
2018
 
2017
 
2018
 
2017
Foreign currency forward exchange contracts
 
$
1

 
$
(114
)
 
$
122

 
$
(253
)
Summary of pre-tax amounts and location of derivatives recognized in the condensed consolidated statements of earnings
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 11 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
 
2018
 
2017
 
2018
 
2017
Foreign currency forward exchange contracts
 
 
 
 
 
 
 
 
 
Designated as cash flow hedges
Cost of products sold
 
$
(54
)
 
$
38

 
$
(144
)
 
$
101

Not designated as hedges
Net foreign exchange loss
 
22

 
(17
)
 
91

 
(88
)
Interest rate swaps designated as fair value hedges
Interest expense, net
 
(63
)
 
11

 
(306
)
 
43

Debt designated as hedged item in fair value hedges
Interest expense, net
 
63

 
(11
)
 
306

 
(43
)
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 condensed consolidated balance sheet as of September 30, 2018:
 
 
 
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
$
8,015

 
$
653

 
$
7,362

 
$
—

Time deposits
559

 
—

 
559

 
—

Debt securities
1,591

 
—

 
1,591

 
—

Equity securities
5

 
5

 
—

 
—

Foreign currency contracts
115

 
—

 
115

 
—

Total assets
$
10,285

 
$
658

 
$
9,627

 
$
—

Liabilities
 
 
 
 
 
 
 
Interest rate hedges
$
707

 
$
—

 
$
707

 
$
—

Foreign currency contracts
16

 
—

 
16

 
—

Contingent consideration
4,866

 
—

 
—

 
4,866

Total liabilities
$
5,589

 
$
—

 
$
723

 
$
4,866


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, 2017:
 
 
 
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
$
9,303

 
$
849

 
$
8,454

 
$
—

Debt securities
2,524

 
—

 
2,524

 
—

Equity securities
4

 
4

 
—

 
—

Foreign currency contracts
23

 
—

 
23

 
—

Total assets
$
11,854

 
$
853

 
$
11,001

 
$
—

Liabilities
 
 
 
 
 
 
 
Interest rate hedges
$
401

 
$
—

 
$
401

 
$
—

Foreign currency contracts
149

 
—

 
149

 
—

Contingent consideration
4,534

 
—

 
—

 
4,534

Total liabilities
$
5,084

 
$
—

 
$
550

 
$
4,534
Schedule 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:
 
 
 
Nine months ended
September 30,
(in millions)
 
2018
 
2017
Beginning balance
 
$
4,534

 
$
4,213

Change in fair value recognized in net earnings
 
432

 
547

Milestone payments
 
(100
)
 
(305
)
Ending balance
 
$
4,866

 
$
4,455
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 September 30, 2018 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
$
3,002

$
3,002

 
$
—

 
$
3,002

 
$
—

Current portion of long-term debt and lease obligations, excluding fair value hedges
1,026

1,025

 
999

 
26

 
—

Long-term debt and lease obligations, excluding fair value hedges
37,187

36,392

 
36,320

 
72

 
—

Total liabilities
$
41,215

$
40,419

 
$
37,319

 
$
3,100

 
$
—

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2017 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)
Assets
 
 
 
 
 
 
 
 
Investments
$
48

$
48

 
$
—

 
$
—

 
$
48

Total assets
$
48

$
48

 
$
—

 
$
—

 
$
48

Liabilities
 
 
 
 
 
 
 
 
Short-term borrowings
$
400

$
400

 
$
—

 
$
400

 
$
—

Current portion of long-term debt and lease obligations, excluding fair value hedges
6,023

6,034

 
4,004

 
2,030

 
—

Long-term debt and lease obligations, excluding fair value hedges
31,346

32,846

 
32,763

 
83

 
—

Total liabilities
$
37,769

$
39,280

 
$
36,767

 
$
2,513

 
$
—
Summary of available-for-sale securities by type
The following table is a summary of available-for-sale securities by type as of September 30, 2018:
 
Amortized cost
 
Gross unrealized
 
Fair value
(in millions)
 
Gains
 
Losses
 
Asset backed securities
$
447

 
$
—

 
$
(2
)
 
$
445

Corporate debt securities
1,050

 
3

 
(3
)
 
1,050

Other debt securities
97

 
—

 
(1
)
 
96

Total
$
1,594

 
$
3

 
$
(6
)
 
$
1,591



The following table is a summary of available-for-sale securities by type as of December 31, 2017:
 
Amortized cost
 
Gross unrealized
 
Fair value
(in millions)
 
Gains
 
Losses
 
Asset backed securities
$
930

 
$
1

 
$
(3
)
 
$
928

Corporate debt securities
1,451

 
4

 
(2
)
 
1,453

Other debt securities
144

 
—

 
(1
)
 
143

Equity securities
4

 
2

 
(2
)
 
4

Total
$
2,529

 
$
7

 
$
(8
)
 
$
2,528