Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling $2.4 billion at March 31, 2026 and $2.5 billion at December 31, 2025, are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than 24 months. Accumulated gains and losses as of March 31, 2026 are reclassified from accumulated other comprehensive income (loss) (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement.

The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated debt, trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are recognized in other expense, net in the condensed consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $9.3 billion at March 31, 2026 and $9.2 billion at December 31, 2025.

The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. The company had an aggregate principal amount of senior Euro notes designated as net investment hedges of €3.1 billion at March 31, 2026 and December 31, 2025. In addition, the company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling €6.7 billion, SEK1.4 billion, CAD800 million and CHF80 million at March 31, 2026 and €6.5 billion, SEK1.4 billion, CAD500 million and CHF80

million at December 31, 2025. The company uses the spot method of assessing hedge effectiveness for derivative instruments designated as net investment hedges. Realized and unrealized gains and losses from these hedges are included in AOCI and the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense, net over the life of the hedging instrument.

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $3.3 billion at March 31, 2026 and $1.8 billion at December 31, 2025. The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.

The company is a party to interest rate swap contracts designated as cash flow hedges with notional amounts totaling $750 million at March 31, 2026. The effect of the hedge contracts is to change a floating-rate interest obligation to a fixed rate for that portion of the floating-rate debt. AbbVie records the contracts at fair value and includes accumulated gains or losses in AOCI which it reclassifies to interest expense, net over the lives of the floating-rate debt.

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	March 31, 2026		December 31, 2025		Balance sheet caption	March 31, 2026		December 31, 2025
Foreign currency forward exchange contracts
Designated as cash flow hedges	Prepaid expenses and other	$	46	$	35	Accounts payable and accrued liabilities	$	25	$	51
Designated as cash flow hedges	Other assets	10		1		Other long-term liabilities	—		—
Designated as net investment hedges	Prepaid expenses and other	21		—		Accounts payable and accrued liabilities	115		220
Designated as net investment hedges	Other assets	5		—		Other long-term liabilities	120		228
Not designated as hedges	Prepaid expenses and other	46		25		Accounts payable and accrued liabilities	24		20


Interest rate swap contracts
Designated as fair value hedges	Prepaid expenses and other	—		—		Accounts payable and accrued liabilities	14		21
Designated as fair value hedges	Other assets	22		30		Other long-term liabilities	40		—
Designated as cash flow hedges	Other assets	5		—		Other long-term liabilities	—		—
Total derivatives		$	155	$	91		$	338	$	540

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss):


	Three months ended March 31,
(in millions)	2026		2025
Foreign currency forward exchange contracts
Designated as cash flow hedges	$	34	$	(19)
Designated as net investment hedges	176		(193)
Interest rate swap contracts designated as cash flow hedges	5		—

Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax gains of $1 million into cost of products sold for foreign currency cash flow hedges and pre-tax gains of $23 million into interest expense, net for other cash flow hedges during the next 12 months.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive income (loss) pre-tax gains of $60 million for the three months ended March 31, 2026 and pre-tax losses of $133 million for the three months ended March 31, 2025.

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 9 for the amount of net gains (losses) reclassified out of AOCI.


		Three months ended March 31,
(in millions)	Statement of earnings caption	2026		2025
Foreign currency forward exchange contracts
Designated as cash flow hedges	Cost of products sold	$	(7)	$	(1)
Designated as net investment hedges	Interest expense, net	37		34
Not designated as hedges	Other expense, net	12		(29)
Interest rate swap contracts
Designated as fair value hedges	Interest expense, net	(41)		55
Debt designated as hedged item in fair value hedges	Interest expense, net	41		(55)
Other	Interest expense, net	6		5

•Level 2 – Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and

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 March 31, 2026 and December 31, 2025:


	March 31, 2026								December 31, 2025
			Basis of fair value measurement								Basis of fair value measurement
(in millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets
Cash and equivalents	$	9,391	$	4,848	$	4,543	$	—	$	5,229	$	4,868	$	361	$	—
Money market funds and time deposits	10		—		10		—		10		—		10		—
Debt securities	20		—		20		—		24		—		24		—
Equity securities	76		32		44		—		103		62		41		—
Interest rate swap contracts	27		—		27		—		30		—		30		—
Foreign currency contracts	128		—		128		—		61		—		61		—

Total assets	$	9,652	$	4,880	$	4,772	$	—	$	5,457	$	4,930	$	527	$	—
Liabilities
Interest rate swap contracts	$	54	$	—	$	54	$	—	$	21	$	—	$	21	$	—

Foreign currency contracts	284		—		284		—		519		—		519		—
Financing liability	377		—		—		377		378		—		—		378
Contingent consideration	27,039		—		—		27,039		25,374		—		—		25,374
Total liabilities	$	27,754	$	—	$	338	$	27,416	$	26,292	$	—	$	540	$	25,752

Money market funds and time deposits are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves. Equity securities primarily consist of investments for which the fair values were determined by using the published market prices per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company were valued using observable market inputs including published interest rate curves and both forward and spot prices for foreign currencies.

The financing liability is related to financing arrangements which the company elected to account for in accordance with the fair value option, as permitted under ASC 825 Financial Instruments. The fair value measurement of the financing liability was determined based on significant unobservable inputs. Potential payments are estimated by applying a probability-weighted expected payment model, which are then discounted to present value. Changes to the fair value of the financing liability can result from changes to one or a number of inputs, including discount rates, estimated probabilities and timing of achieving milestones and estimated amounts of future sales. The change in fair value recognized in net earnings is recorded in other expense, net in the condensed consolidated statements of earnings and the change in fair value attributable to instrument-specific credit risk is recognized in other comprehensive income (loss). Changes in fair value recognized in other expense, net and in other comprehensive income (loss) for the three months ended March 31, 2026 and 2025 were insignificant.

The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs, including the discount rate, estimated probabilities and timing of achieving specified development, regulatory and commercial milestones and the estimated amount of future sales of the acquired products. The potential contingent consideration payments are estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which are then discounted to present value. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of certain of these inputs. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period.

The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:


	March 31, 2026		December 31, 2025
	Range	Weighted average(a)	Range	Weighted average(a)
Discount rate	4.1 % - 5.0 %	4.3 %	3.7 % - 4.8 %	4.0 %
Probability of payment for royalties by indication	100 %	100 %	100 %	100 %

Projected year of payments	2026 - 2037	2030	2026 - 2037	2030

There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy. The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs:


	Three months ended March 31,
(in millions)	2026		2025
Beginning balance	$	25,374	$	21,666
Additions(a)	—		78
Change in fair value recognized in net earnings	2,387		1,518
Payments	(722)		(549)
Ending balance	$	27,039	$	22,713

Certain financial instruments are carried at historical cost or some basis other than fair value. The book value, fair value and bases used to measure the approximate fair values of certain financial instruments as of March 31, 2026 are shown in the table below:


					Basis of fair value measurement
(in millions)	Book value		Fair value		Level 1		Level 2		Level 3



Liabilities

Current portion of long-term debt (a)	$	8,265	$	8,252	$	8,231	$	21	$	—
Long-term debt (a)	64,289		60,615		58,188		2,427		—
Total liabilities	$	72,554	$	68,867	$	66,419	$	2,448	$	—

The book value, fair value and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2025 are shown in the table below:


					Basis of fair value measurement
(in millions)	Book value		Fair value		Level 1		Level 2		Level 3



Liabilities
Short-term borrowings	$	2,499	$	2,497	$	—	$	2,497	$	—
Current portion of long-term debt (a)	6,016		5,985		5,965		20		—
Long-term debt (a)	58,650		55,822		53,381		2,441		—
Total liabilities	$	67,165	$	64,304	$	59,346	$	4,958	$	—

AbbVie also holds investments in equity securities that do not have readily determinable fair values. The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur. The carrying amount of these investments was $163 million as of March 31, 2026 and $159 million as of December 31, 2025. No significant cumulative upward or downward adjustments have been recorded for these investments as of March 31, 2026.


(in millions)
Senior Notes
	Senior Floating Rate Notes due 2028 (a)	$	750
	3.775% Senior Notes due 2028	1,500
	4.125% Senior Notes due 2031	1,250
	4.40% Senior Notes due 2033	1,250
	4.75% Senior Notes due 2036	1,500
	5.55% Senior Notes due 2056	1,250
	5.65% Senior Notes due 2066	500
Total debt issued		$	8,000

The notes are unsecured, unsubordinated obligations of AbbVie and will rank equally in right of payment with all of AbbVie’s existing and future unsecured, unsubordinated indebtedness, liabilities and other obligations. AbbVie may redeem the fixed-rate senior notes prior to maturity at a redemption price equal to the greater of the principal amount or the sum of present values of the remaining scheduled payments of principal and interest plus a make-whole premium. With exception of the fixed-rate senior notes due 2028, AbbVie may also redeem the fixed-rate senior notes at par between one and six months prior to maturity. The senior floating rate notes may not be redeemed prior to maturity.

There were no commercial paper borrowings outstanding as of March 31, 2026 and $499 million as of December 31, 2025. The weighted-average interest rate on commercial paper borrowings was 3.85% for the three months ended March 31, 2026 and 4.59% for the three months ended March 31, 2025.

In April 2025, the company entered into a $4.0 billion 364-day term loan credit agreement. In May 2025, the company borrowed $2.0 billion under this term loan credit agreement which was outstanding and included in short-term borrowings as of December 31, 2025. In March 2026, the company repaid the $2.0 billion amount outstanding under this term loan credit agreement and terminated the agreement.

AbbVie has two revolving credit facilities available, including a $5.0 billion five-year revolving credit facility that matures in March 2028 and a $3.0 billion five-year revolving credit facility that matures in January 2030. The revolving credit facilities are available to support AbbVie’s commercial paper program and enable the company to borrow funds to meet liquidity requirements on an unsecured basis at variable interest rates and contain various covenants. At March 31, 2026, the company was in compliance with all covenants, and commitment fees under the revolving credit facilities were insignificant. No amounts were outstanding under the company's revolving credit facilities as of March 31, 2026 and December 31, 2025.