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PRNewswire 25-Jan-2019 7:42 AM
NORTH CHICAGO, Ill., Jan. 25, 2019 /PRNewswire/ -- AbbVie (NYSE:ABBV) announced financial results for the fourth quarter and full year ended December 31, 2018.
"We delivered exceptional performance in 2018, including operational revenue growth of more than 15 percent and EPS growth above 40 percent," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "We're entering an important new phase for AbbVie. The continued momentum of our business, combined with the launch and ramp of several new products, will allow us to drive strong earnings growth once again in 2019 and position us for growth over the longer term."
Fourth-Quarter Results
Key Events from the Fourth Quarter
Full-Year 2019 Outlook
AbbVie is issuing GAAP diluted EPS guidance for the full-year 2019 of $7.39 to $7.49. The company's 2019 GAAP guidance does not reflect non-cash charges for contingent consideration adjustments related to the expected approval of risankizumab in the first half of the year. AbbVie expects to deliver adjusted diluted EPS for the full-year 2019 of $8.65 to $8.75, representing growth of 10.0 percent at the mid-point. The company's 2019 adjusted diluted EPS guidance excludes $1.26 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments, and other specified items.
About AbbVie
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, LinkedIn, or Instagram.
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 2018 and 2017 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 2019 financial guidance is also being provided on both a reported and a non-GAAP basis.
Prior Period Reclassifications
Certain reclassifications were made to conform the prior period financial results to the current period presentation.
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, 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 2017 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.
AbbVie Inc. |
||||||||||||||
Key Product Revenues |
||||||||||||||
Quarter Ended December 31, 2018 |
||||||||||||||
(Unaudited) |
||||||||||||||
% Change vs. 4Q17 |
||||||||||||||
Net Revenues (in millions) |
International |
Total |
||||||||||||
U.S. |
Int'l. |
Total |
U.S. |
Operational |
Reported |
Operational |
Reported |
|||||||
ADJUSTED NET REVENUESa |
$5,688 |
$2,617 |
$8,305 |
14.3% |
(2.5)% |
(5.2)% |
8.3% |
7.3% |
||||||
Immunology |
3,615 |
1,303 |
4,918 |
9.1 |
(14.8) |
(17.5) |
1.4 |
0.5 |
||||||
Humira |
3,615 |
1,303 |
4,918 |
9.1 |
(14.8) |
(17.5) |
1.4 |
0.5 |
||||||
Hematologic Oncology |
929 |
201 |
1,130 |
51.0 |
47.6 |
46.9 |
50.3 |
50.2 |
||||||
Imbruvicab |
839 |
167 |
1,006 |
43.2 |
36.4 |
36.4 |
42.0 |
42.0 |
||||||
Venclexta |
90 |
34 |
124 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
||||||
HCV |
408 |
454 |
862 |
92.0 |
56.6 |
53.0 |
71.4 |
69.3 |
||||||
Mavyret |
408 |
411 |
819 |
89.3 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
||||||
Viekira |
— |
43 |
43 |
n/m |
(59.9) |
(62.9) |
(58.6) |
(61.7) |
||||||
Other Key Products |
798 |
531 |
1,329 |
(2.4) |
(5.1) |
(8.4) |
(3.5) |
(4.9) |
||||||
Creon |
261 |
— |
261 |
11.4 |
n/a |
n/a |
11.4 |
11.4 |
||||||
Lupron |
196 |
40 |
236 |
8.3 |
(0.9) |
(7.2) |
6.5 |
5.3 |
||||||
Synthroid |
209 |
— |
209 |
2.0 |
n/a |
n/a |
2.0 |
2.0 |
||||||
Synagis |
— |
264 |
264 |
n/a |
(3.7) |
(6.3) |
(3.7) |
(6.3) |
||||||
AndroGel |
76 |
— |
76 |
(45.8) |
n/a |
n/a |
(45.8) |
(45.8) |
||||||
Duodopa |
23 |
90 |
113 |
34.8 |
12.8 |
9.6 |
16.7 |
14.0 |
||||||
Sevoflurane |
20 |
66 |
86 |
(14.8) |
(9.5) |
(14.1) |
(10.6) |
(14.2) |
||||||
Kaletra |
13 |
71 |
84 |
(24.4) |
(22.8) |
(25.6) |
(23.1) |
(25.5) |
Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. |
|
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, 2018 |
||||||||||||||
(Unaudited) |
||||||||||||||
% Change vs. 12M17 |
||||||||||||||
Net Revenues (in millions) |
International |
Total |
||||||||||||
U.S. |
Int'l. |
Total |
U.S. |
Operational |
Reported |
Operational |
Reported |
|||||||
ADJUSTED NET REVENUESa |
$21,524 |
$11,209 |
$32,733 |
17.9% |
10.2% |
12.6% |
15.2% |
16.0% |
||||||
Immunology |
13,685 |
6,251 |
19,936 |
10.7 |
0.6 |
3.1 |
7.4 |
8.2 |
||||||
Humira |
13,685 |
6,251 |
19,936 |
10.7 |
0.6 |
3.1 |
7.4 |
8.2 |
||||||
Hematologic Oncology |
3,215 |
719 |
3,934 |
43.9 |
55.3 |
55.7 |
45.8 |
45.9 |
||||||
Imbruvicab |
2,968 |
622 |
3,590 |
38.4 |
45.0 |
45.0 |
39.5 |
39.5 |
||||||
Venclexta |
247 |
97 |
344 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
||||||
HCV |
1,617 |
1,999 |
3,616 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
||||||
Mavyret |
1,614 |
1,824 |
3,438 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
>100.0 |
||||||
Viekira |
3 |
175 |
178 |
(96.7) |
(74.8) |
(75.6) |
(76.5) |
(77.2) |
||||||
Other Key Products |
3,108 |
1,840 |
4,948 |
1.3 |
(2.9) |
(1.9) |
(0.3) |
0.1 |
||||||
Creon |
928 |
— |
928 |
11.7 |
n/a |
n/a |
11.7 |
11.7 |
||||||
Lupron |
726 |
166 |
892 |
8.6 |
4.7 |
3.4 |
7.9 |
7.6 |
||||||
Synthroid |
776 |
— |
776 |
(0.6) |
n/a |
n/a |
(0.6) |
(0.6) |
||||||
Synagis |
— |
726 |
726 |
n/a |
(2.8) |
(1.6) |
(2.8) |
(1.6) |
||||||
AndroGel |
469 |
— |
469 |
(18.8) |
n/a |
n/a |
(18.8) |
(18.8) |
||||||
Duodopa |
80 |
350 |
430 |
31.4 |
14.8 |
19.1 |
17.7 |
21.2 |
||||||
Sevoflurane |
74 |
317 |
391 |
(6.2) |
(4.3) |
(4.4) |
(4.6) |
(4.7) |
||||||
Kaletra |
55 |
281 |
336 |
(22.1) |
(20.1) |
(20.2) |
(20.4) |
(20.5) |
Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. |
|
n/a = not applicable |
|
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, 2018 and 2017 |
|||||||||||||||
(Unaudited) (In millions, except per share data) |
|||||||||||||||
Fourth Quarter |
Twelve Months |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
Net revenues |
$ |
8,305 |
$ |
7,739 |
$ |
32,753 |
$ |
28,216 |
|||||||
Cost of products sold |
2,022 |
2,281 |
7,718 |
7,042 |
|||||||||||
Selling, general and administrative |
1,929 |
1,956 |
7,399 |
6,295 |
|||||||||||
Research and development |
6,495 |
1,408 |
10,329 |
5,007 |
|||||||||||
Acquired in-process research and development |
300 |
312 |
424 |
327 |
|||||||||||
Other expense |
— |
— |
500 |
— |
|||||||||||
Total operating costs and expenses |
10,746 |
5,957 |
26,370 |
18,671 |
|||||||||||
Operating earnings (loss) |
(2,441) |
1,782 |
6,383 |
9,545 |
|||||||||||
Interest expense, net |
319 |
252 |
1,144 |
1,004 |
|||||||||||
Net foreign exchange loss |
6 |
320 |
24 |
348 |
|||||||||||
Other (income) expense, net |
(393) |
17 |
18 |
466 |
|||||||||||
Earnings (loss) before income taxes |
(2,373) |
1,193 |
5,197 |
7,727 |
|||||||||||
Income tax expense (benefit) |
(547) |
1,141 |
(490) |
2,418 |
|||||||||||
Net earnings (loss) |
$ |
(1,826) |
$ |
52 |
$ |
5,687 |
$ |
5,309 |
|||||||
Diluted earnings (loss) per share |
$ |
(1.23) |
$ |
0.03 |
$ |
3.66 |
$ |
3.30 |
|||||||
Weighted-average diluted shares outstanding |
1,496 |
1,602 |
1,546 |
1,603 |
|||||||||||
Adjusted diluted earnings per sharea |
$ |
1.90 |
$ |
1.48 |
$ |
7.91 |
$ |
5.60 |
|||||||
Adjusted weighted-average diluted shares outstandinga |
1,501 |
1,602 |
1,546 |
1,603 |
a |
Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details. Weighted-average diluted shares outstanding includes the effect of dilutive securities. Due to the GAAP net loss in the fourth quarter ended December 31, 2018, certain shares issuable under stock-based compensation plans that were dilutive on a non-GAAP basis were excluded from the computation of GAAP diluted EPS because the effect would have been antidilutive. |
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 |
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Stemcentrx-related impairment refers to the net impact of the intangible asset impairment and the related fair value adjustment to contingent consideration liabilities. Impacts of U.S. tax reform primarily reflects a net tax benefit related to the timing of the new legislation's phase in on certain subsidiaries. Other primarily includes restructuring charges associated with streamlining global operations. |
2. The impact of the specified items by line item was as follows: |
|||||||||||||||||||
4Q18 |
|||||||||||||||||||
Cost of products |
SG&A |
R&D |
Acquired IPR&D |
Other |
|||||||||||||||
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 income (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 |
|||||||||||
Quarter Ended December 31, 2017 |
|||||||||||
(Unaudited) (In millions, except per share data) |
|||||||||||
1. Specified items impacted results as follows: |
|||||||||||
4Q17 |
|||||||||||
Earnings |
Diluted |
||||||||||
Pre-tax |
After-tax |
EPS |
|||||||||
As reported (GAAP) |
$ |
1,193 |
$ |
52 |
$ |
0.03 |
|||||
Adjusted for specified items: |
|||||||||||
Intangible asset amortization |
268 |
203 |
0.13 |
||||||||
Milestones and other R&D expenses |
75 |
75 |
0.05 |
||||||||
Acquired IPR&D |
312 |
312 |
0.19 |
||||||||
Change in fair value of contingent consideration |
79 |
79 |
0.05 |
||||||||
Litigation reserves |
273 |
221 |
0.14 |
||||||||
Intangible asset impairment |
354 |
244 |
0.15 |
||||||||
U.S. tax reform repatriation tax |
— |
4,509 |
2.81 |
||||||||
Other impacts related to tax law change |
316 |
(3,267) |
(2.04) |
||||||||
Tax audit settlement |
— |
(91) |
(0.06) |
||||||||
Other |
75 |
52 |
0.03 |
||||||||
As adjusted (non-GAAP) |
$ |
2,945 |
$ |
2,389 |
$ |
1.48 |
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Other primarily includes restructuring charges associated with streamlining global operations. |
2. The impact of the specified items by line item was as follows: |
|||||||||||||||||||||||
4Q17 |
|||||||||||||||||||||||
Cost of products |
SG&A |
R&D |
Acquired IPR&D |
Net |
Other |
||||||||||||||||||
As reported (GAAP) |
$ |
2,281 |
$ |
1,956 |
$ |
1,408 |
$ |
312 |
$ |
320 |
$ |
17 |
|||||||||||
Adjusted for specified items: |
|||||||||||||||||||||||
Intangible asset amortization |
(268) |
— |
— |
— |
— |
— |
|||||||||||||||||
Milestones and other R&D expenses |
— |
— |
(75) |
— |
— |
— |
|||||||||||||||||
Acquired IPR&D |
— |
— |
— |
(312) |
— |
— |
|||||||||||||||||
Change in fair value of contingent consideration |
— |
— |
— |
— |
— |
(79) |
|||||||||||||||||
Litigation reserves |
— |
(273) |
— |
— |
— |
— |
|||||||||||||||||
Intangible asset impairment |
(354) |
— |
— |
— |
— |
— |
|||||||||||||||||
Other impacts related to tax law change |
— |
— |
— |
— |
(316) |
— |
|||||||||||||||||
Other |
(33) |
(37) |
(5) |
— |
— |
— |
|||||||||||||||||
As adjusted (non-GAAP) |
$ |
1,626 |
$ |
1,646 |
$ |
1,328 |
$ |
— |
$ |
4 |
$ |
(62) |
3. The adjusted tax rate for the fourth quarter of 2017 was 18.9 percent, as detailed below: |
||||||||||
4Q17 |
||||||||||
Pre-tax income |
Income taxes |
Tax rate |
||||||||
As reported (GAAP) |
$ |
1,193 |
$ |
1,141 |
95.6 |
% |
||||
Specified items |
1,752 |
(585) |
(33.4) |
% |
||||||
As adjusted (non-GAAP) |
$ |
2,945 |
$ |
556 |
18.9 |
% |
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 |
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Stemcentrx-related impairment refers to the net impact of the intangible asset impairment and the related fair value adjustment to contingent consideration liabilities. Impacts of U.S. tax reform primarily reflects a net tax benefit related to the timing of the new legislation's phase in on certain subsidiaries. Other primarily includes restructuring charges associated with streamlining global operations and milestone revenue under a previously announced collaboration. |
2. The impact of the specified items by line item was as follows: |
|||||||||||||||||||||||||||
12M18 |
|||||||||||||||||||||||||||
Net |
Cost of products |
SG&A |
R&D |
Acquired IPR&D |
Other |
Other |
|||||||||||||||||||||
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 income |
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 |
% |
AbbVie Inc. |
|||||||||||
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
|||||||||||
Twelve Months Ended December 31, 2017 |
|||||||||||
(Unaudited) (In millions, except per share data) |
|||||||||||
1. Specified items impacted results as follows: |
|||||||||||
12M17 |
|||||||||||
Earnings |
Diluted |
||||||||||
Pre-tax |
After-tax |
EPS |
|||||||||
As reported (GAAP) |
$ |
7,727 |
$ |
5,309 |
$ |
3.30 |
|||||
Adjusted for specified items: |
|||||||||||
Intangible asset amortization |
1,076 |
809 |
0.51 |
||||||||
Milestones and other R&D expenses |
143 |
143 |
0.09 |
||||||||
Acquired IPR&D |
327 |
327 |
0.20 |
||||||||
Acquisition related costs |
73 |
49 |
0.03 |
||||||||
Change in fair value of contingent consideration |
626 |
625 |
0.39 |
||||||||
Litigation reserves |
370 |
286 |
0.18 |
||||||||
Intangible asset impairment |
354 |
244 |
0.15 |
||||||||
U.S. tax reform repatriation tax |
— |
4,509 |
2.81 |
||||||||
Other impacts related to tax law change |
316 |
(3,267) |
(2.04) |
||||||||
Tax audit settlement |
— |
(91) |
(0.06) |
||||||||
Other |
94 |
68 |
0.04 |
||||||||
As adjusted (non-GAAP) |
$ |
11,106 |
$ |
9,011 |
$ |
5.60 |
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Acquisition related costs primarily includes the amortization of the acquisition date fair value step-up for inventory related to the acquisition of Pharmacyclics. Other primarily includes restructuring charges associated with streamlining global operations. |
2. The impact of the specified items by line item was as follows: |
|||||||||||||||||||||||
12M17 |
|||||||||||||||||||||||
Cost of products |
SG&A |
R&D |
Acquired IPR&D |
Net |
Other |
||||||||||||||||||
As reported (GAAP) |
$ |
7,042 |
$ |
6,295 |
$ |
5,007 |
$ |
327 |
$ |
348 |
$ |
466 |
|||||||||||
Adjusted for specified items: |
|||||||||||||||||||||||
Intangible asset amortization |
(1,076) |
— |
— |
— |
— |
— |
|||||||||||||||||
Milestones and other R&D expenses |
— |
— |
(143) |
— |
— |
— |
|||||||||||||||||
Acquired IPR&D |
— |
— |
— |
(327) |
— |
— |
|||||||||||||||||
Acquisition related costs |
(52) |
(14) |
(5) |
— |
— |
(2) |
|||||||||||||||||
Change in fair value of contingent consideration |
— |
— |
— |
— |
— |
(626) |
|||||||||||||||||
Litigation reserves |
— |
(370) |
— |
— |
— |
— |
|||||||||||||||||
Intangible asset impairment |
(354) |
— |
— |
— |
— |
— |
|||||||||||||||||
Other impacts related to tax law change |
— |
— |
— |
— |
(316) |
— |
|||||||||||||||||
Other |
(47) |
(42) |
(5) |
— |
— |
— |
|||||||||||||||||
As adjusted (non-GAAP) |
$ |
5,513 |
$ |
5,869 |
$ |
4,854 |
$ |
— |
$ |
32 |
$ |
(162) |
3. The adjusted tax rate for the full-year 2017 was 18.9 percent, as detailed below: |
||||||||||
12M17 |
||||||||||
Pre-tax income |
Income taxes |
Tax rate |
||||||||
As reported (GAAP) |
$ |
7,727 |
$ |
2,418 |
31.3 |
% |
||||
Specified items |
3,379 |
(323) |
(9.6) |
% |
||||||
As adjusted (non-GAAP) |
$ |
11,106 |
$ |
2,095 |
18.9 |
% |
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SOURCE AbbVie