Full Press Release Details
NORTH CHICAGO, Ill., Feb. 7, 2020 /PRNewswire/ -- AbbVie (NYSE: ABBV ) announced financial results for the fourth quarter and full year ended December 31, 2019.
"Our strong performance this quarter completes another excellent year for AbbVie," said Richard A. Gonzalez , chairman and chief executive officer, AbbVie. "The launches of Skyrizi and Rinvoq are going extremely well, and we are entering 2020 with substantial momentum. We also look forward to completing the planned Allergan acquisition in the first quarter."
Fourth-Quarter Results
Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates.
Full-Year 2020 Outlook
AbbVie is issuing its standalone GAAP diluted EPS guidance for the full-year 2020 of $7.66 to $7.76 , representing growth of 46.0 percent at the midpoint. AbbVie expects to deliver standalone adjusted diluted EPS for the full-year 2020 of $9.61 to $9.71 , representing growth of 8.1 percent at the midpoint. The company's standalone 2020 adjusted diluted EPS guidance excludes $1.95 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.
AbbVie expects standalone revenue growth approaching 8.0 percent on an operational basis.
Statements Required by the Irish Takeover Rules
The directors of AbbVie accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of AbbVie (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Any holder of 1% or more of any class of relevant securities of AbbVie Inc. may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013.
AbbVie is a global, research-driven biopharmaceutical company committed to developing innovative advanced therapies for some of the world's most complex and critical conditions. The company's mission is to use its expertise, dedicated people and unique approach to innovation to markedly improve treatments across four primary therapeutic areas: immunology, oncology, virology and neuroscience. In more than 75 countries, AbbVie employees are working every day to advance health solutions for people around the world. For more information about AbbVie, please visit us at www.abbvie.com . Follow @abbvie on Twitter, Facebook or LinkedIn .
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our fourth-quarter performance. The call will be webcast through AbbVie's Investor Relations website at investors.abbvie.com . An archived edition of the call will be available after 11:00 a.m. Central time .
Non-GAAP Financial Results
Financial results for 2019 and 2018 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. AbbVie's management believes non-GAAP financial measures provide useful information to investors regarding AbbVie's results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. The company's 2020 financial guidance is also being provided on both a reported and a non-GAAP basis.
Forward-Looking Statements
Some statements in this news release are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "project" and similar expressions, among others, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the possibility that the proposed acquisition of Allergan will not be pursued, failure to obtain necessary regulatory approvals or required financing or to satisfy any of the other conditions to the proposed acquisition, failure to realize the expected benefits of the proposed acquisition, failure to promptly and effectively integrate Allergan's businesses, significant transaction costs and/or unknown or inestimable liabilities, potential litigation associated with the proposed acquisition, challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie's operations is set forth in Item 1A, "Risk Factors," of AbbVie's 2018 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission (SEC). AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
Profit Forecasts
AbbVie is issuing its GAAP diluted EPS guidance for the full-year 2020 of $7.66 to $7.76 , representing growth of 46.0 percent at the midpoint.
AbbVie is issuing its adjusted diluted EPS guidance for the full-year 2020 of $9.61 to $9.71 , representing growth of 8.1 percent at the midpoint.
AbbVie expects adjusted diluted EPS guidance for the first quarter of 2020 of between $2.28 and $2.30 , excluding approximately 53 cents of non-cash amortization and other specified items.
The guidance statements above regarding GAAP EPS and adjusted EPS for the full-year 2020 and adjusted EPS for the first quarter of 2020 each constitute a profit forecast for the purposes of the Rule 28 of the Irish Takeover Rules.
The company will issue 2020 proforma guidance following the close of the planned Allergan acquisition.
* Adjusted Earnings Per Share ("EPS") is a non-GAAP diluted earnings per share, typically reported in AbbVie's quarterly and annual financial results for the full year guidance and in the earnings calls for the next quarter guidance updates. This is not prepared in accordance with U.S. GAAP. This non-GAAP financial measure should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP.
Adjusted EPS is calculated as net income excluding certain non-cash items and factors which are unusual or unpredictable, which include: amortization and impairment of intangible assets; change in fair value of contingent consideration; major restructuring costs, integration and other related transaction costs relating to acquisitions; litigation reserves; R&D milestones and acquired IPR&D, together with the tax effects of all these items.
Basis of Preparation
The AbbVie profit forecasts (the " Profit Forecasts ") are based on the forecast of the results for the twelve months ending December 31, 2020 .
In accordance with Rule 28 of the Irish Takeover Rules, the directors of AbbVie confirm that the Profit Forecasts have been properly compiled on the basis of the assumptions stated below on a basis consistent with the accounting policies of AbbVie, which are in accordance with U.S. GAAP and those which AbbVie anticipates will be applicable for the full year ending December 31, 2020 (as adjusted for AbbVie non-GAAP policy to disclose adjusted earnings excluding specified items).
The AbbVie non-GAAP profit forecast does not include the proposed acquisition of Allergan. However, the AbbVie GAAP profit forecast includes estimated one-time expenses relating to the transaction such as financing costs, legal, consultants, accountants, regulatory and other fees, which are expected to be incurred in the first quarter of 2020.
Principal Assumptions
The Profit Forecasts have been compiled on the basis of the following assumptions:
Assumptions which are within AbbVie's influence or control:
Assumptions which are outside of AbbVie's influence or control:
| AbbVie Inc. Key Product Revenues Quarter Ended December 31, 2019 (Unaudited) | ||||||||||||||
| % Change vs. 4Q18 | ||||||||||||||
| Net Revenues (in millions) | International | Total | ||||||||||||
| U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported | |||||||
| ADJUSTED NET REVENUES a | $6,429 | $2,275 | $8,704 | 13.0% | (11.5)% | (13.1)% | 5.3% | 4.8% | ||||||
| Immunology | 4,195 | 971 | 5,166 | 16.0 | (23.6) | (25.5) | 5.5 | 5.0 | ||||||
| Humira | 3,969 | 948 | 4,917 | 9.8 | (25.4) | (27.3) | 0.5 | — | ||||||
| Skyrizi | 193 | 23 | 216 | n/m | n/m | n/m | n/m | n/m | ||||||
| Rinvoq | 33 | — | 33 | n/m | n/m | n/m | n/m | n/m | ||||||
| Hematologic Oncology | 1,230 | 317 | 1,547 | 32.6 | 58.6 | 57.4 | 37.2 | 37.0 | ||||||
| Imbruvica b | 1,073 | 223 | 1,296 | 28.0 | 33.8 | 33.8 | 28.9 | 28.9 | ||||||
| Venclexta | 157 | 94 | 251 | 75.8 | >100.0 | >100.0 | >100.0 | >100.0 | ||||||
| HCV | 306 | 326 | 632 | (25.1) | (27.6) | (28.1) | (26.4) | (26.7) | ||||||
| Mavyret | 306 | 322 | 628 | (25.4) | (20.8) | (21.4) | (23.1) | (23.4) | ||||||
| Viekira | — | 4 | 4 | n/m | (91.1) | (90.5) | (89.7) | (89.1) | ||||||
| Other Key Products | 780 | 506 | 1,286 | (3.0) | (3.7) | (5.1) | (3.2) | (3.8) | ||||||
| Creon | 292 | — | 292 | 11.5 | n/a | n/a | 11.5 | 11.5 | ||||||
| Lupron | 174 | 45 | 219 | (11.3) | 16.5 | 13.7 | (6.6) | (7.1) | ||||||
| Synthroid | 204 | — | 204 | (2.2) | n/a | n/a | (2.2) | (2.2) | ||||||
| Synagis | — | 261 | 261 | n/a | (1.2) | (1.4) | (1.2) | (1.4) | ||||||
| Duodopa | 25 | 93 | 118 | 8.3 | 6.9 | 3.1 | 7.1 | 4.1 | ||||||
| Sevoflurane | 21 | 60 | 81 | 13.9 | (8.6) | (10.4) | (3.6) | (5.0) | ||||||
| Kaletra | 8 | 46 | 54 | (41.8) | (34.0) | (35.6) | (35.3) | (36.6) | ||||||
| AndroGel | 23 | — | 23 | (69.1) | n/a | n/a | (69.1) | (69.1) | ||||||
| Orilissa | 33 | 1 | 34 | >100.0 | n/m | n/m | >100.0 | >100.0 |
| Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates. |
| n/a = not applicable |
| n/m = not meaningful |
| a Adjusted net revenues exclude specified items. Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details. Percentage change is calculated using adjusted net revenues. |
| b Reflects profit sharing for Imbruvica international revenues. |
| AbbVie Inc. Key Product Revenues Twelve Months Ended December 31, 2019 (Unaudited) | ||||||||||||||
| % Change vs. 12M18 | ||||||||||||||
| Net Revenues (in millions) | International | Total | ||||||||||||
| U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported | |||||||
| ADJUSTED NET REVENUES a | $23,907 | $9,359 | $33,266 | 11.1% | (13.4)% | (16.5)% | 2.7% | 1.6% | ||||||
| Immunology | 15,222 | 4,349 | 19,571 | 11.2 | (27.1) | (30.4) | (0.8) | (1.8) | ||||||
| Humira | 14,864 | 4,305 | 19,169 | 8.6 | (27.8) | (31.1) | (2.9) | (3.9) | ||||||
| Skyrizi | 311 | 44 | 355 | n/m | n/m | n/m | n/m | n/m | ||||||
| Rinvoq | 47 | — | 47 | n/m | n/m | n/m | n/m | n/m | ||||||
| Hematologic Oncology | 4,351 | 1,115 | 5,466 | 35.4 | 56.7 | 55.1 | 39.3 | 39.0 | ||||||
| Imbruvica b | 3,830 | 844 | 4,674 | 29.1 | 35.8 | 35.8 | 30.2 | 30.2 | ||||||
| Venclexta | 521 | 271 | 792 | >100.0 | >100.0 | >100.0 | >100.0 | >100.0 | ||||||
| HCV | 1,473 | 1,456 | 2,929 | (9.0) | (24.7) | (27.1) | (17.7) | (19.0) | ||||||
| Mavyret | 1,473 | 1,420 | 2,893 | (8.8) | (19.6) | (22.1) | (14.6) | (15.9) | ||||||
| Viekira | — | 36 | 36 | (100.0) | (77.2) | (79.2) | (77.6) | (79.6) | ||||||
| Other Key Products | 3,019 | 1,770 | 4,789 | (3.2) | (0.3) | (3.9) | (2.1) | (3.4) | ||||||
| Creon | 1,041 | — | 1,041 | 12.2 | n/a | n/a | 12.2 | 12.2 | ||||||
| Lupron | 720 | 167 | 887 | (0.8) | 6.0 | 0.8 | 0.5 | (0.5) | ||||||
| Synthroid | 786 | — | 786 | 1.3 | n/a | n/a | 1.3 | 1.3 | ||||||
| Synagis | — | 718 | 718 | n/a | 0.9 | (1.2) | 0.9 | (1.2) | ||||||
| Duodopa | 97 | 364 | 461 | 20.4 | 9.8 | 4.2 | 11.7 | 7.2 | ||||||
| Sevoflurane | 74 | 274 | 348 | 2.0 | (9.5) | (13.8) | (7.4) | (10.9) | ||||||
| Kaletra | 38 | 245 | 283 | (31.0) | (9.5) | (12.9) | (12.9) | (15.8) | ||||||
| AndroGel | 172 | — | 172 | (63.3) | n/a | n/a | (63.3) | (63.3) | ||||||
| Orilissa | 91 | 2 | 93 | >100.0 | n/m | n/m | >100.0 | >100.0 |
| Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates. |
| n/a = not applicable |
| n/m = not meaningful |
| a Adjusted net revenues exclude specified items. Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details. Percentage change is calculated using adjusted net revenues. |
| b Reflects profit sharing for Imbruvica international revenues. |
| AbbVie Inc. Consolidated Statements of Earnings Quarter and Twelve Months Ended December 31, 2019 and 2018 (Unaudited) (In millions, except per share data) | |||||||||||||||
| Fourth Quarter Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net revenues | $ | 8,704 | $ | 8,305 | $ | 33,266 | $ | 32,753 | |||||||
| Cost of products sold | 2,006 | 2,022 | 7,439 | 7,718 | |||||||||||
| Selling, general and administrative | 1,951 | 1,929 | 6,942 | 7,399 | |||||||||||
| Research and development | 1,542 | 6,495 | 6,407 | 10,329 | |||||||||||
| Acquired in-process research and development | 139 | 300 | 385 | 424 | |||||||||||
| Other operating expense (income) | (890) | — | (890) | 500 | |||||||||||
| Total operating costs and expenses | 4,748 | 10,746 | 20,283 | 26,370 | |||||||||||
| Operating earnings (loss) | 3,956 | (2,441) | 12,983 | 6,383 | |||||||||||
| Interest expense, net | 455 | 319 | 1,509 | 1,144 | |||||||||||
| Net foreign exchange loss | 11 | 6 | 42 | 24 | |||||||||||
| Other expense (income), net | 416 | (393) | 3,006 | 18 | |||||||||||
| Earnings (loss) before income taxes | 3,074 | (2,373) | 8,426 | 5,197 | |||||||||||
| Income tax expense (benefit) | 273 | (547) | 544 | (490) | |||||||||||
| Net earnings (loss) | $ | 2,801 | $ | (1,826) | $ | 7,882 | $ | 5,687 | |||||||
| Diluted earnings (loss) per share | $ | 1.88 | $ | (1.23) | $ | 5.28 | $ | 3.66 | |||||||
| Weighted-average diluted shares outstanding | 1,485 | 1,496 | 1,484 | 1,546 | |||||||||||
| Adjusted diluted earnings per share a | $ | 2.21 | $ | 1.90 | $ | 8.94 | $ | 7.91 | |||||||
| Adjusted weighted-average diluted shares outstanding a | 1,485 | 1,501 | 1,484 | 1,546 |
| AbbVie Inc. Reconciliation of GAAP Reported to Non-GAAP Adjusted Information Quarter Ended December 31, 2019 (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 4Q19 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 3,074 | $ | 2,801 | $ | 1.88 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 391 | 324 | 0.22 | ||||||||
| Acquisition related costs | 226 | 183 | 0.12 | ||||||||
| Milestones and other R&D expenses | 217 | 193 | 0.13 | ||||||||
| Acquired IPR&D | 139 | 123 | 0.08 | ||||||||
| Reata divestiture | (330) | (297) | (0.20) | ||||||||
| Litigation matters | (550) | (435) | (0.29) | ||||||||
| Change in fair value of contingent consideration | 438 | 438 | 0.29 | ||||||||
| Restructuring | 19 | 15 | 0.01 | ||||||||
| Tax audit settlement | — | (133) | (0.09) | ||||||||
| Other | (10) | 82 | 0.06 | ||||||||
| As adjusted (non-GAAP) | $ | 3,614 | $ | 3,294 | $ | 2.21 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||||||||||
| 4Q19 | |||||||||||||||||||||||||||
| Cost of products sold | SG&A | R&D | Acquired IPR&D | Other operating expense (income) | Interest expense, net | Other (income) expense, net | |||||||||||||||||||||
| As reported (GAAP) | $ | 2,006 | $ | 1,951 | $ | 1,542 | $ | 139 | $ | (890) | $ | 455 | $ | 416 | |||||||||||||
| Adjusted for specified items: | |||||||||||||||||||||||||||
| Intangible asset amortization | (391) | — | — | — | — | — | — | ||||||||||||||||||||
| Acquisition related costs | — | (53) | — | — | — | (173) | — | ||||||||||||||||||||
| Milestones and other R&D expenses | — | — | (217) | — | — | — | — | ||||||||||||||||||||
| Acquired IPR&D | — | — | — | (139) | — | — | — | ||||||||||||||||||||
| Reata divestiture | — | — | — | — | 330 | — | — | ||||||||||||||||||||
| Litigation matters | — | — | — | — | 550 | — | — | ||||||||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | — | — | (438) | ||||||||||||||||||||
| Restructuring | (10) | (15) | 6 | — | — | — | — | ||||||||||||||||||||
| Other | — | — | — | — | 10 | — | — | ||||||||||||||||||||
| As adjusted (non-GAAP) | $ | 1,605 | $ | 1,883 | $ | 1,331 | $ | — | $ | — | $ | 282 | $ | (22) |
| 3. The adjusted tax rate for the fourth quarter of 2019 was 8.8 percent, as detailed below: | ||||||||||
| 4Q19 | ||||||||||
| Pre-tax earnings | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 3,074 | $ | 273 | 8.9 | % | ||||
| Specified items | 540 | 47 | 8.6 | % | ||||||
| As adjusted (non-GAAP) | $ | 3,614 | $ | 320 | 8.8 | % |
| AbbVie Inc. Reconciliation of GAAP Reported to Non-GAAP Adjusted Information Quarter Ended December 31, 2018 (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 4Q18 | |||||||||||
| Earnings (Loss) | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | (2,373) | $ | (1,826) | $ | (1.23) | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 320 | 262 | 0.18 | ||||||||
| Milestones and other R&D expenses | 50 | 50 | 0.03 | ||||||||
| Acquired IPR&D | 300 | 300 | 0.20 | ||||||||
| Stemcentrx-related impairment | 4,642 | 4,117 | 2.75 | ||||||||
| Charitable contributions | 115 | 89 | 0.06 | ||||||||
| Change in fair value of contingent consideration | 46 | 46 | 0.03 | ||||||||
| Litigation reserves | 7 | 6 | — | ||||||||
| Impacts of U.S. tax reform | — | (86) | (0.05) | ||||||||
| Tax audit settlement | — | (131) | (0.09) | ||||||||
| Other | 44 | 35 | 0.02 | ||||||||
| As adjusted (non-GAAP) | $ | 3,151 | $ | 2,862 | $ | 1.90 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||
| 4Q18 | |||||||||||||||||||
| Cost of products sold | SG&A | R&D | Acquired IPR&D | Other (income) expense, net | |||||||||||||||
| As reported (GAAP) | $ | 2,022 | $ | 1,929 | $ | 6,495 | $ | 300 | $ | (393) | |||||||||
| Adjusted for specified items: | |||||||||||||||||||
| Intangible asset amortization | (320) | — | — | — | — | ||||||||||||||
| Milestones and other R&D expenses | — | — | (50) | — | — | ||||||||||||||
| Acquired IPR&D | — | — | — | (300) | — | ||||||||||||||
| Stemcentrx-related impairment | — | — | (5,070) | — | 428 | ||||||||||||||
| Charitable contributions | — | (115) | — | — | — | ||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | (46) | ||||||||||||||
| Litigation reserves | — | (7) | — | — | — | ||||||||||||||
| Other | (28) | (10) | (6) | — | — | ||||||||||||||
| As adjusted (non-GAAP) | $ | 1,674 | $ | 1,797 | $ | 1,369 | $ | — | $ | (11) |
| 3. The adjusted tax rate for the fourth quarter of 2018 was 9.1 percent, as detailed below: | ||||||||||
| 4Q18 | ||||||||||
| Pre-tax earnings (loss) | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | (2,373) | $ | (547) | 23.1 | % | ||||
| Specified items | 5,524 | 836 | 15.1 | % | ||||||
| As adjusted (non-GAAP) | $ | 3,151 | $ | 289 | 9.1 | % |
| AbbVie Inc. Reconciliation of GAAP Reported to Non-GAAP Adjusted Information Twelve Months Ended December 31, 2019 (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 12M19 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 8,426 | $ | 7,882 | $ | 5.28 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 1,553 | 1,286 | 0.86 | ||||||||
| Acquisition related costs | 415 | 338 | 0.23 | ||||||||
| Milestones and other R&D expenses | 312 | 288 | 0.20 | ||||||||
| Acquired IPR&D | 385 | 364 | 0.25 | ||||||||
| Reata divestiture | (330) | (297) | (0.20) | ||||||||
| Litigation matters | (523) | (414) | (0.28) | ||||||||
| Change in fair value of contingent consideration | 3,182 | 3,184 | 2.14 | ||||||||
| Restructuring | 207 | 168 | 0.10 | ||||||||
| Stemcentrx-related impairment | 939 | 823 | 0.56 | ||||||||
| Tax audit settlement | — | (400) | (0.27) | ||||||||
| Other | 10 | 102 | 0.07 | ||||||||
| As adjusted (non-GAAP) | $ | 14,576 | $ | 13,324 | $ | 8.94 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||||||||||
| 12M19 | |||||||||||||||||||||||||||
| Cost of products sold | SG&A | R&D | Acquired IPR&D | Other operating expense (income) | Interest expense, net | Other (income) expense, net | |||||||||||||||||||||
| As reported (GAAP) | $ | 7,439 | $ | 6,942 | $ | 6,407 | $ | 385 | $ | (890) | $ | 1,509 | $ | 3,006 | |||||||||||||
| Adjusted for specified items: | |||||||||||||||||||||||||||
| Intangible asset amortization | (1,553) | — | — | — | — | — | — | ||||||||||||||||||||
| Acquisition related costs | — | (103) | — | — | — | (312) | — | ||||||||||||||||||||
| Milestones and other R&D expenses | — | — | (312) | — | — | — | — | ||||||||||||||||||||
| Acquired IPR&D | — | — | — | (385) | — | — | — | ||||||||||||||||||||
| Reata divestiture | — | — | — | — | 330 | — | — | ||||||||||||||||||||
| Litigation matters | — | (27) | — | — | 550 | — | — | ||||||||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | — | — | (3,182) | ||||||||||||||||||||
| Restructuring | (25) | (125) | (57) | — | — | — | — | ||||||||||||||||||||
| Stemcentrx-related impairment | — | — | (1,030) | — | — | — | 91 | ||||||||||||||||||||
| Other | (1) | — | (19) | — | 10 | — | — | ||||||||||||||||||||
| As adjusted (non-GAAP) | $ | 5,860 | $ | 6,687 | $ | 4,989 | $ | — | $ | — | $ | 1,197 | $ | (85) |
| 3. The adjusted tax rate for the full-year 2019 was 8.6 percent, as detailed below: | ||||||||||
| 12M19 | ||||||||||
| Pre-tax earnings | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 8,426 | $ | 544 | 6.5 | % | ||||
| Specified items | 6,150 | 708 | 11.5 | % | ||||||
| As adjusted (non-GAAP) | $ | 14,576 | $ | 1,252 | 8.6 | % |
| AbbVie Inc. Reconciliation of GAAP Reported to Non-GAAP Adjusted Information Twelve Months Ended December 31, 2018 (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 12M18 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 5,197 | $ | 5,687 | $ | 3.66 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 1,294 | 1,063 | 0.69 | ||||||||
| Milestones and other R&D expenses | 137 | 137 | 0.09 | ||||||||
| Acquired IPR&D | 424 | 424 | 0.27 | ||||||||
| Calico collaboration | 500 | 500 | 0.32 | ||||||||
| Stemcentrx-related impairment | 4,642 | 4,117 | 2.66 | ||||||||
| Charitable contributions | 350 | 271 | 0.18 | ||||||||
| Change in fair value of contingent consideration | 478 | 478 | 0.31 | ||||||||
| Litigation reserves | 353 | 282 | 0.18 | ||||||||
| Impacts of U.S. tax reform | — | (620) | (0.40) | ||||||||
| Tax audit settlement | — | (131) | (0.09) | ||||||||
| Other | 82 | 74 | 0.04 | ||||||||
| As adjusted (non-GAAP) | $ | 13,457 | $ | 12,282 | $ | 7.91 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||||||||||
| 12M18 | |||||||||||||||||||||||||||
| Net revenues | Cost of products sold | SG&A | R&D | Acquired IPR&D | Other operating expense (income) | Other (income) expense, net | |||||||||||||||||||||
| As reported (GAAP) | $ | 32,753 | $ | 7,718 | $ | 7,399 | $ | 10,329 | $ | 424 | $ | 500 | $ | 18 | |||||||||||||
| Adjusted for specified items: | |||||||||||||||||||||||||||
| Intangible asset amortization | — | (1,294) | — | — | — | — | — | ||||||||||||||||||||
| Milestones and other R&D expenses | — | — | — | (137) | — | — | — | ||||||||||||||||||||
| Acquired IPR&D | — | — | — | — | (424) | — | — | ||||||||||||||||||||
| Calico collaboration | — | — | — | — | — | (500) | — | ||||||||||||||||||||
| Stemcentrx-related impairment | — | — | — | (5,070) | — | — | 428 | ||||||||||||||||||||
| Charitable contributions | — | — | (350) | — | — | — | — | ||||||||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | — | — | (478) | ||||||||||||||||||||
| Litigation reserves | — | — | (353) | — | — | — | — | ||||||||||||||||||||
| Other | (20) | (62) | (11) | (29) | — | — | — | ||||||||||||||||||||
| As adjusted (non-GAAP) | $ | 32,733 | $ | 6,362 | $ | 6,685 | $ | 5,093 | $ | — | $ | — | $ | (32) |
| 3. The adjusted tax rate for the full-year 2018 was 8.7 percent, as detailed below: | ||||||||||
| 12M18 | ||||||||||
| Pre-tax earnings | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 5,197 | $ | (490) | (9.4) | % | ||||
| Specified items | 8,260 | 1,665 | 20.2 | % | ||||||
| As adjusted (non-GAAP) | $ | 13,457 | $ | 1,175 | 8.7 | % |