Financial Instruments and Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2015

Financial Instruments and Fair Value Measures

Schedule of amounts and balance sheet location of derivatives

The following table summarizes the amounts and location of AbbVie’s derivative instruments as of September 30, 2015:

	Fair value – Derivatives in asset position		Fair value – Derivatives in liability position
(in millions)	Balance sheet caption	Amount	Balance sheet caption	Amount
Foreign currency forward exchange contracts —
Hedging instruments	Prepaid expenses and other	$ 7	Accounts payable and accrued liabilities	$—
Others not designated as hedges	Prepaid expenses and other	23	Accounts payable and accrued liabilities	17
Interest rate swaps designated as fair value hedges	Prepaid expenses and other	62	Other long-term liabilities	6
Total derivatives		$ 92		$ 23

The following table summarizes the amounts and location of AbbVie’s derivative instruments as of December 31, 2014:

	Fair value – Derivatives in asset position		Fair value – Derivatives in liability position
(in millions)	Balance sheet caption	Amount	Balance sheet caption	Amount
Foreign currency forward exchange contracts —
Hedging instruments	Prepaid expenses and other	$ 141	Accounts payable and accrued liabilities	$—
Others not designated as hedges	Prepaid expenses and other	70	Accounts payable and accrued liabilities	63
Interest rate swaps designated as fair value hedges	n/a	—	Other long-term liabilities	180
Total derivatives		$ 211		$ 243

Schedule of derivative activity and amounts and location of income (expense) and gain (loss) reclassified into net earnings

		Three months ended September 30,				Nine months ended September 30,
(in millions)	Income statement caption	2015		2014		2015		2014
Foreign currency forward exchange contracts —
Designated as cash flow hedges	Cost of products sold	$ 89		$ (23	)	$ 171		$ (59	)
Not designated as hedges	Net foreign exchange loss	(5	)	(215	)	(170	)	(233	)
Interest rate swaps designated as fair value hedges	Interest expense, net	235		(9	)	236		163
Total		$ 319		$ (247	)	$ 237		$ (129	)

Summary of the bases used to measure certain assets and liabilities that are carried at fair value on a recurring basis in the condensed consolidated balance sheets

		Basis of fair value measurement
(in millions)	Balance at September 30, 2015	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	$ 9,223	$ 910	$ 8,313	$—
Time deposits	8	—	8	—
Equity securities	33	33	—	—
Interest rate hedges	62	—	62	—
Foreign currency contracts	30	—	30	—
Total assets	$ 9,356	$ 943	$ 8,413	$—
Liabilities
Interest rate hedges	$ 6	$—	$ 6	$—
Foreign currency contracts	17	—	17	—
Total liabilities	$ 23	$—	$ 23	$—

		Basis of fair value measurement
(in millions)	Balance at December 31, 2014	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	$ 8,348	$ 1,214	$ 7,134	$—
Time deposits	9	—	9	—
Equity securities	13	13	—	—
Foreign currency contracts	211	—	211	—
Total assets	$ 8,581	$ 1,227	$ 7,354	$—
Liabilities
Interest rate hedges	$ 180	$—	$ 180	$—
Foreign currency contracts	63	—	63	—
Total liabilities	$ 243	$—	$ 243	$—

Schedule of the carrying values and fair values of certain financial instruments

	Book values		Approximate fair values
(in millions)	September 30, 2015	December 31, 2014	September 30, 2015	December 31, 2014
Assets
Investments	$ 58	$ 95	$ 96	$ 145
Liabilities
Short-term borrowings	760	425	760	425
Current portion of long-term debt and lease obligations	8	4,014	24	4,026
Long-term debt and lease obligations, excluding fair value hedges	31,303	10,718	31,023	10,803

Schedule of fair value of financial instruments by fair value basis

		Basis of fair value measurement
(in millions)	Fair Value at September 30, 2015	Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Assets
Investments	$ 96	$ 51	$ 17	$ 28
Total assets	$ 96	$ 51	$ 17	$ 28
Liabilities
Short-term borrowings	$ 760	$—	$ 760	$—
Current portion of long-term debt and lease obligations	24	—	24	—
Long-term debt and lease obligations, excluding fair value hedges	31,023	30,929	94	—
Total liabilities	$ 31,807	$ 30,929	$ 878	$—

		Basis of fair value measurement
(in millions)	Fair Value at December 31, 2014	Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Assets
Investments	$ 145	$ 68	$ 13	$ 64
Total assets	$ 145	$ 68	$ 13	$ 64
Liabilities
Short-term borrowings	$ 425	$—	$ 425	$—
Current portion of long-term debt and lease obligations	4,026	4,005	21	—
Long-term debt and lease obligations, excluding fair value hedges	10,803	10,710	93	—
Total liabilities	$ 15,254	$ 14,715	$ 539	$—