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Equity
 12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Equity Equity
 
Stock-Based Compensation
AbbVie grants stock-based awards to eligible employees pursuant to the AbbVie 2013 Incentive Stock Program (2013 ISP), which provides for several different forms of benefits, including nonqualified stock options, RSUs and various performance-based awards. Under the 2013 ISP, 100 million shares of AbbVie common stock were reserved for issuance as awards to AbbVie employees. The 2013 ISP also facilitated the assumption of certain awards granted under Abbott’s incentive stock program, which were adjusted and converted into Abbott and AbbVie stock-based awards as a result of AbbVie's separation from Abbott.
AbbVie measures compensation expense for stock-based awards based on the grant date fair value of the awards and the estimated number of awards that are expected to vest. Forfeitures are estimated based on historical experience at the time of grant and are revised in subsequent periods if actual forfeitures differ from those estimates. Compensation cost for stock-based awards is amortized over the service period, which could be shorter than the vesting period if an employee is retirement eligible. Retirement eligible employees generally are those who are age 55 or older and have at least 10 years of service.
Stock-based compensation expense is principally related to awards issued pursuant to the 2013 ISP and is summarized as follows:
 
Years ended December 31,
(in millions)
2019
 
2018
 
2017
Cost of products sold
$
29

 
$
27

 
$
23

Research and development
171

 
169

 
159

Selling, general and administrative
230

 
225

 
183

Pre-tax compensation expense
430

 
421

 
365

Tax benefit
80

 
73

 
73

After-tax compensation expense
$
350

 
$
348

 
$
292


Realized excess tax benefits associated with stock-based compensation totaled $15 million in 2019, $78 million in 2018 and $71 million in 2017.
Stock Options
Stock options awarded to employees typically have a contractual term of 10 years and generally vest in one-third increments over a three-year period. The exercise price is equal to at least 100% of the market value on the date of grant. The fair value is determined using the Black-Scholes model. The weighted-average grant-date fair values of stock options granted were $12.54 in 2019, $21.63 in 2018 and $9.80 in 2017.
The following table summarizes AbbVie stock option activity in 2019:
(options in thousands, aggregate intrinsic value in millions)
Options
 
Weighted-
 average
 exercise price
 
Weighted-
 average
 remaining
 life (in years)
 
Aggregate
 intrinsic value
Outstanding at December 31, 2018
6,143

 
$
55.05

 
6.2
 
$
242

Granted
1,002

 
79.02

 
 
 
 
Exercised
(375
)
 
23.72

 
 
 
 
Lapsed
(9
)
 
20.09

 
 
 
 
Outstanding at December 31, 2019
6,761

 
$
60.39

 
5.9
 
$
207

Exercisable at December 31, 2019
4,924

 
$
51.90

 
4.9
 
$
186


The total intrinsic value of options exercised was $22 million in 2019, $215 million in 2018 and $371 million in 2017. The total fair value of options vested during 2019 was $13 million. As of December 31, 2019, $6 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years.
RSUs and Performance Shares
RSUs awarded to employees other than senior executives and other key employees generally vest in one-third increments over a three year period. Recipients of these RSUs are entitled to receive dividend equivalents as dividends are declared and paid during the RSU vesting period.
The majority of the equity awards AbbVie grants to its senior executives and other key employees are performance-based. Equity awards granted to senior executives and other key employees consist of a combination of performance-vested RSUs and performance shares as well as non-qualified stock options described above. The performance-vested RSUs have the potential to vest in one-third increments during a three-year performance period based on AbbVie’s ROE relative to a defined peer group of pharmaceutical, biotech and life sciences companies. The recipient may receive one share of AbbVie common stock for each vested award. The performance shares have the potential to vest over a three-year performance period and may be earned based on AbbVie’s EPS achievement and AbbVie’s total stockholder return (TSR) (a market condition) relative to a defined peer group of pharmaceutical, biotech and life sciences companies. Dividend equivalents on performance-vested RSUs and performance shares accrue during the performance period and are payable at vesting only to the extent that shares are earned.
The weighted-average grant-date fair value of RSUs and performance shares generally is determined based on the number of shares/units granted and the quoted price of AbbVie’s common stock on the date of grant. The weighted-average grant-date fair values of performance shares with a TSR market condition are determined using the Monte Carlo simulation model.

The following table summarizes AbbVie RSU and performance share activity for 2019:
(share units in thousands)
Share units
 
Weighted-average
 grant date fair value
Outstanding at December 31, 2018
9,868

 
$
79.90

Granted
5,584

 
78.03

Vested
(4,616
)
 
71.30

Forfeited
(604
)
 
82.19

Outstanding at December 31, 2019
10,232

 
$
81.72


The fair market value of RSUs and performance shares (as applicable) vested was $371 million in 2019, $583 million in 2018 and $348 million in 2017.
As of December 31, 2019, $327 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years.
Cash Dividends
Cash dividends declared per common share totaled $4.39 in 2019, $3.95 in 2018 and $2.63 in 2017. The following table summarizes quarterly cash dividends declared during 2019, 2018 and 2017:
2019
 
2018
 
2017
Date Declared
 
Payment Date
 
Dividend Per Share
 
Date Declared
 
Payment Date
 
Dividend Per Share
 
Date Declared
 
Payment Date
 
Dividend Per Share
11/01/19
 
02/14/20
 
$1.18
 
11/02/18
 
02/15/19
 
$1.07
 
10/27/17
 
02/15/18
 
$0.71
09/06/19
 
11/15/19
 
$1.07
 
09/07/18
 
11/15/18
 
$0.96
 
09/08/17
 
11/15/17
 
$0.64
06/20/19
 
08/15/19
 
$1.07
 
06/14/18
 
08/15/18
 
$0.96
 
06/22/17
 
08/15/17
 
$0.64
02/21/19
 
05/15/19
 
$1.07
 
02/15/18
 
05/15/18
 
$0.96
 
02/16/17
 
05/15/17
 
$0.64

Stock Repurchase Program
The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management’s discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under these programs are recorded at acquisition cost, including related expenses and are available for general corporate purposes.
AbbVie repurchased 4 million shares for $300 million in 2019. AbbVie's remaining stock repurchase authorization was approximately $4.0 billion as of December 31, 2019.
On February 15, 2018, AbbVie's board of directors authorized a new $10.0 billion stock repurchase program, which superseded AbbVie's previous stock repurchase program. On December 13, 2018, AbbVie's board of directors authorized a $5.0 billion increase to the existing $10.0 billion stock repurchase program. Under this authorization, AbbVie repurchased approximately 109 million shares for $10.7 billion in 2018.
Under previous stock repurchase programs, AbbVie made open-market share repurchases of approximately 11 million shares for $1.3 billion in 2018 and approximately 13 million shares for $1.0 billion in 2017.
Accumulated Other Comprehensive Loss
The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for 2019, 2018 and 2017:
(in millions) (brackets denote losses)
Foreign
 currency
 translation
adjustments
 
Net investment hedging
 activities
 
Pension
 and post-
employment
 benefits
 
Marketable security activities
 
Cash flow hedging
 activities
 
Total
Balance as of December 31, 2016
$
(1,435
)
 
$
140

 
$
(1,513
)
 
$
46

 
$
176

 
$
(2,586
)
Other comprehensive income (loss) before reclassifications
680

 
(343
)
 
(480
)
 
29

 
(230
)
 
(344
)
Net losses (gains) reclassified from accumulated other comprehensive loss
316

 
—

 
74

 
(75
)
 
(112
)
 
203

Net current-period other comprehensive income (loss)
996

 
(343
)
 
(406
)
 
(46
)
 
(342
)
 
(141
)
Balance as of December 31, 2017
(439
)
 
(203
)
 
(1,919
)
 
—

 
(166
)
 
(2,727
)
Other comprehensive income (loss) before reclassifications
(391
)
 
138

 
84

 
(14
)
 
156

 
(27
)
Net losses reclassified from accumulated other comprehensive loss
—

 
—

 
113

 
4

 
157

 
274

Net current-period other comprehensive income (loss)
(391
)
 
138

 
197

 
(10
)
 
313

 
247

Balance as of December 31, 2018
(830
)
 
(65
)
 
(1,722
)
 
(10
)
 
147

 
(2,480
)
Other comprehensive income (loss) before reclassifications
(98
)
 
95

 
(1,330
)
 
12

 
298

 
(1,023
)
Net losses (gains) reclassified from accumulated other comprehensive loss
—

 
(21
)
 
87

 
(2
)
 
(157
)
 
(93
)
Net current-period other comprehensive income (loss)
(98
)
 
74

 
(1,243
)
 
10

 
141

 
(1,116
)
Balance as of December 31, 2019
$
(928
)
 
$
9

 
$
(2,965
)
 
$
—

 
$
288

 
$
(3,596
)

Other comprehensive loss included foreign currency translation adjustments totaling losses of $98 million in 2019 and $391 million in 2018 which were principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets.
In 2017, AbbVie reclassified $316 million of historical currency translation losses from AOCI related to the liquidation of certain foreign entities following the enactment of U.S. tax reform. These losses were included in net foreign exchange loss in the consolidated statement of earnings and had no related income tax impacts. Other comprehensive loss in 2017 also included foreign currency translation adjustments totaling a gain of $680 million, which was principally due to the impact of the strengthening of the Euro on the translation of the company’s Euro-denominated assets.
Other comprehensive loss for 2019 included pension and post-employment benefit plan losses of $1.2 billion primarily due to an actuarial loss driven by lower discount rates.  See Note 12 for additional information.

The table below presents the impact on AbbVie's consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss:
years ended December 31 (in millions) (brackets denote gains)
2019
 
2018
 
2017
Net investment hedging activities
 
 
 
 
 
Gains on derivative amount excluded from effectiveness testing(a)
$
(27
)
 
$
—

 
$
—

Tax expense
6

 
—

 
—

Total reclassifications, net of tax
$
(21
)
 
$
—

 
$
—

Pension and post-employment benefits
 
 
 
 
 
Amortization of actuarial losses and other(b)
$
110

 
$
141

 
$
107

Tax benefit
(23
)
 
(28
)
 
(33
)
Total reclassifications, net of tax
$
87

 
$
113

 
$
74

Cash flow hedging activities
 
 
 
 
 
Losses (gains) on foreign currency forward exchange contracts(c)
$
(167
)
 
$
161

 
$
(118
)
Gains on treasury rate lock agreements and interest rate swap contracts(a)
(4
)
 
—

 
—

Tax expense (benefit)
14

 
(4
)
 
6

Total reclassifications, net of tax
$
(157
)
 
$
157

 
$
(112
)
(a)
Amounts are included in interest expense, net (see Note 11).
(b)
Amounts are included in the computation of net periodic benefit cost (see Note 12).
(c)
Amounts are included in cost of products sold (see Note 11).
Other
In addition to common stock, AbbVie's authorized capital includes 200 million shares of preferred stock, par value $0.01. As of December 31, 2019, no shares of preferred stock were issued or outstanding.